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Crude Inventories Surge To Record High As Energy Demand Collapses

Tyler Durden's picture




 

A month ago we highlighted the somewhat stunning reality of the real economy via the EIA's detailed energy supply and demand data. The key takeaway was  that we hoped this did not represent the true state of the economy since the data was so dismal. Fast forward to today and the DOE just released a much higher than expected build in crude inventories that took the stuffed-channel of oil products to all-time highs. The 395.3 million barrels is higher than the previous record in July 1990. There appears to be a number of factors at play - none of which are positive. There is a surge in supply due to the incessant harvesting of shale oil (which could have its own problems as we noted here). Second, we suspect there is a degree of 'channel-stuffing' occurring - if we pump it, they will buy - as producers and transporters are desperate to keep active and show incremental business (despite fading railcar loadings). But perhaps most important, as EIA data has shown, there has been a collapse in end demand for crude products not seen since the 1990s. Today's surge in inventories appears to confirm demand remains subdued at best.

 

 

Chart: Bloomberg

 

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Wed, 05/01/2013 - 11:43 | 3518125 derek_vineyard
derek_vineyard's picture

i better quickly quadruple my long spx

Wed, 05/01/2013 - 11:43 | 3518139 Cult_of_Reason
Cult_of_Reason's picture

Cramer said it is very bullish.

Booyah!

Wed, 05/01/2013 - 11:45 | 3518156 New England Patriot
New England Patriot's picture

This must mean prices will go up.

Wed, 05/01/2013 - 11:46 | 3518171 Cult_of_Reason
Cult_of_Reason's picture

It means buy stocks, "Bear Stearns is fine".

Wed, 05/01/2013 - 11:57 | 3518217 Curt W
Curt W's picture

"Thats just silly"

Wed, 05/01/2013 - 12:05 | 3518266 Cult_of_Reason
Cult_of_Reason's picture

"Buy in May and it's okay"

Wed, 05/01/2013 - 12:50 | 3518481 somecallmetimmah
somecallmetimmah's picture

Rhyming: Is there *anything* it can't fix?

Wed, 05/01/2013 - 13:21 | 3518646 AssFire
AssFire's picture

NOT surprised! It is evident since Feb. here in Houston- nothing being built- OTC next week will be interesting.

Wed, 05/01/2013 - 12:11 | 3518312 espirit
espirit's picture

Sooo... Energy demand goes down, inventories go up.

Applying this theory to Gold, demand goes up and inventories go down.

In the first case price should go down, and in the second price should go up.

The new normal suggests re-writing of supply/demand history, and results are now given as matrix metrics.

 

 

Wed, 05/01/2013 - 12:15 | 3518339 New England Patriot
New England Patriot's picture

Think of it like water (liquidity) flooding the compartments of a ship: lots of stuff inside the boat starts floating... until the boat sinks and drags it all down.

Wed, 05/01/2013 - 12:37 | 3518423 fourchan
fourchan's picture

omg thats the best analogy of the year.

Wed, 05/01/2013 - 13:14 | 3518610 Rory_Breaker
Rory_Breaker's picture

+ 1 trillion (or whatever liquidity QE4EVA manages to flood the system with)

Wed, 05/01/2013 - 12:01 | 3518255 disabledvet
disabledvet's picture

Exactly. The chart says oil but the headline "energy." you have to have a 101 understanding of economics to understand "demand for energy is unlimited" but when I comes to oil "there are substitution effects." the problem of course is that Government...or Detroit I guess...doesn't want the oil price to "be allowed to collapse." WHY? If it's cheap enough demand will soar....unless of course the substitution is so valuable it makes oil...worthless.

Wed, 05/01/2013 - 12:10 | 3518288 FieldingMellish
FieldingMellish's picture

Saudis need the oil price to climb at least as fast as their domestic inflation rate in USD terms (5% currently). Baring short-term tactical fluctuations, they will continue to be the only major producer worldwide with pricing power (taps on/taps off) and thus control prices regardless of US inventory levels.

Wed, 05/01/2013 - 12:34 | 3518424 PMakoi
PMakoi's picture

Oil for gold.  Gold for food.  BIS is getting too complicated.

Wed, 05/01/2013 - 15:35 | 3519364 Citxmech
Citxmech's picture

Disabledvet - if the POO were allowed to collapse - all those expensive tar sand/bitumen projects would have to be shuttered.  Price-fixing the POO is designed to ensure continued access to the spice for the mid-term - or so seems to be the plan.

The problem is, with all the cheap-stuff gone, society is going to need to be retooled for an "expensive energy future" (aka a contracting, more localized system - which will fuck the hell out of the bankers as debt-issued, fractional reserve fiat money doesnt work in an economic system in terminal decline).

Wed, 05/01/2013 - 16:15 | 3519550 DaveyJones
DaveyJones's picture

so true

this is the most important oil story going on

http://www.theoildrum.com/node/9946

Wed, 05/01/2013 - 13:02 | 3518543 MarsInScorpio
MarsInScorpio's picture

FieldingMellish:

 

Please allow me to respectfully suggest you rethink your conclusion.

 

The reality is that you will eventually come to a point when there is no viable storage left for stuffing. There comes a point when price has to drop because there are no longer buyers willing to serve as money-losing storage facilities just to accommodate the OPEC regimes.

 

Even the OPEC regimes can only stuff so much on their territory.

 

And then there is the continuing crisis in shipping. If no one is buying, then ships will sail in circles to keep the barnacles off the hull. More money lost.

 

What is all gets down to is the disconnect between where Ben’s helicopter is flying, and where he should be dropping dollars.

 

By pursuing his “wealth effect” strategy, all he is doing is giving dollars to people who don’t spend them on consumer items. Instead, their gambling instinct takes over, and they hit the rigged casino collectively known in common parlance as Wall Street.

 

Add in the insanity brought about by HFT, and you can quickly see why two things are occurring:

 

1)  The S & P climbs regardless of reality because the money is going to the gamblers and not the consumers.

 

2) Inflation is not going into hyperspace because consumers do not have too many dollars chasing too few goods. This is why you aren’t seeing the Weimer Effect; if all those dollars were hitting wallets instead of fund accounts, the hyperinflation you keep expecting to see would, in fact, occur.

 

Reality is that this is the Second Great Depression – why this is not labeled as such escapes me except by saying that A) the MSM and the talking heads of media, government, politics, and finance don’t have the guts to tell the truth – or else they don’t understand it (which is where my office pool money is going) – and B) because that label doesn’t fit well with a narrative that the economy is in recovery, and, as pronounced today by the AP, this downtick is just a “soft patch” that we are experiencing now.

 

Of course, that is a lie. If ZH is irreplaceable for no other reasons, it is irreplaceable because it relentlessly exposes the lies with hard-core data, primarily in chart or other comprehensible graphic format. ZH, and when its posters are being serious instead of sarcastic, is probably the most valuable source of comprehensive economic information available today.

 

So there you are. Eventually you can only stuff so much until you run out of room. Lower prices aren’t producing reflextive demand because the consuming 99% is busted broke. It really doesn’t matter how cheap it is if you don’t have the money to buy it.

 

What this means to all of us is that we need to act in the reality that we are in The Second Great Depression, that eventually demand will fall so low that you can’t stuff enough, or terminate employees enough, or print money enough, before it collapses.

 

Buy physical PMs, stay alert for signs that the government is getting ready to steal your assets, stay off the radar as much as possible, and keep reading ZH.

-30-

 

Wed, 05/01/2013 - 13:46 | 3518778 Taint Boil
Taint Boil's picture

 

 

Um, sir … we usually only write broken and fragmented sentences here and most of the time containing belittling code words referencing Obama or Jews and the such …. Are you sure you are on the right website?

Wed, 05/01/2013 - 14:56 | 3519187 Doctor of Reality
Doctor of Reality's picture

He's correct IMHO. When I'm in a rush, I zip past the "funnies" to find the posts with detailed analysis. After awhile, it's easy to tell the bullshitters from those willing to debate and learn. I like to learn and apply what I learn. This site has helped me a great deal in learning about the true state of the economy... amoung other topics.  

Wed, 05/01/2013 - 14:24 | 3518992 purplefrog
purplefrog's picture

Dang!  Well said, MarsMan, well said!  It for posters like you that I put up with the crap.

Wed, 05/01/2013 - 15:19 | 3519290 JimS
JimS's picture

Mars, well written. Kudos, to you.

Thu, 05/02/2013 - 08:16 | 3521726 e-recep
e-recep's picture

"ZH, and when its posters are being serious instead of sarcastic, is probably the most valuable source of comprehensive economic information available today."

Ouch, that hurt.

Wed, 05/01/2013 - 14:29 | 3519029 steve from virginia
steve from virginia's picture

 

 

 

What matters is access to credit ... If peeps cannot afford oil they can't buy it.

 

Credit collapse = no oil.

Wed, 05/01/2013 - 17:46 | 3519895 Nassim
Nassim's picture

FieldingMellish,

You are absolutely correct, and that is why the Saudis are behind all these efforts in the Middle East to destroy production: invasion and destruction of Iraq, Iran sanctions, Libya overthrow of Gaddaffi and currently the Syrian embroglio.

Wed, 05/01/2013 - 11:45 | 3518165 camaro68ss
camaro68ss's picture

My 68 Camaro is coming out this weekend. I love me that 8 miles per gal

Wed, 05/01/2013 - 12:01 | 3518242 Saint Pitbull
Saint Pitbull's picture

Don't think that this is going to translate into sharply lower prices.

The lack of refinery capacity (due to regulations) guarantees that one of the primary beneficiaries is ... gov't.  Watch for some new taxes and no one will notice.  shhhh

Wed, 05/01/2013 - 12:13 | 3518306 WarHorse
WarHorse's picture

YOu are definitely NOT a student of our existing enegy complex.  There is no longer a shortage of refinery capacity in this country.  Do a little research and you will find I am correct

Wed, 05/01/2013 - 12:13 | 3518307 Rustysilver
Rustysilver's picture

Saint Pitbull,

You may know a lot more about refinery capacity than I do, but I don't buy it.  I would like to know about refinery throughput and has it improved over last 20 years.

Than I would agree with  you.

Wed, 05/01/2013 - 13:34 | 3518737 marathonman
marathonman's picture

There have been incremental and massive refinery expansions over the last decade.  Marathon Garyville refinery basically doubled an already large refinery in 2011.  Motiva in Beaumont spent billions to double their capacity but botched the startup in 2012 and dissolved their feed piping, exchangers, and brand new crude tower.  I think the restart of the new crude unit is soon.  In the meantime several refineries in New Jersey and Pennsylvania have shuttered recently due to lack of access to cheaper WTI and even cheaper Canadian syncrude.  They were stuck having to buy Brent and paying 10-20$/bbl more to make gasoline that would not compete cost wise with WTI.  And so they went tits up.

Refinery capacity is just fine.  It's easier to expand capacity of existing facilities than build grass roots and deal with the NIMBY head aches and enviro Nazi regulators.  Believe it or not, there is a somewhat free market in refining.  Right now refiners with access to WTI and Canadian syncrude are going gang busters.  Check out HFC, MPC, CLMT, VLO, and PSX.  They are rolling over at the moment though....

Wed, 05/01/2013 - 14:02 | 3518842 RockRiver
RockRiver's picture

Not to mention the huge expansion in progress at BP's Whiting Indiana plant. Eventually capacity at Whiting will be doubled and will run both canadian sour and various light sweet grades of crude.

Wed, 05/01/2013 - 12:03 | 3518244 Manthong
Manthong's picture

8 miles per gal

you are obviously an envionnmental whacko.

the 409 in my 79 TA is nowhere near as frugal   :-)

Wed, 05/01/2013 - 12:03 | 3518273 de3de8
de3de8's picture

Must be a big block or pulling low gear or both.

Wed, 05/01/2013 - 12:28 | 3518387 Manthong
Manthong's picture

bored 409 ci…Holley double pumper..  Hookers,    3:42 rear   more..

Standing next it to at idle is a religious experience

Breaking the rubber loose is … use your imagination   :J

Wed, 05/01/2013 - 12:49 | 3518467 Scro
Scro's picture

But can you lift the front wheels at 170 mph? Hayabusa baby.

Wed, 05/01/2013 - 12:55 | 3518507 Manthong
Manthong's picture

geez.. No way..

I like to savor that out of the gate rush.

Wed, 05/01/2013 - 14:59 | 3519212 Doctor of Reality
Wed, 05/01/2013 - 12:15 | 3518336 azzhatter
azzhatter's picture

You will need to report to a re-education camp #473. Excessive oil consumption is unpatriotic (unless in a Bently driven by an oligarch obama supporter)

Wed, 05/01/2013 - 12:44 | 3518447 STP
STP's picture

Long live American Muscle!  The 74' Corvette Stingray came out to play last night and it doesn't get much better mileage than the 'maro.  The four speed car, runs a double pumper with mechanical secondaries and it likes nothing better than driving your foot, deep into the floor.  While the kids play car games on Xbox, there ain't NOTHING like the real deal!

Wed, 05/01/2013 - 13:13 | 3518606 somecallmetimmah
somecallmetimmah's picture

"My 68 Camaro is coming out...8 miles per gal..."

Is that secret code for...ah, never mind.

Wed, 05/01/2013 - 11:48 | 3518162 Aeternus
Aeternus's picture

Is goldman short yet? I need to know so I can go long /QM.

 

http://www.youtube.com/watch?v=deuC8GPr31A

Wed, 05/01/2013 - 12:27 | 3518382 Ruffcut
Ruffcut's picture

I think they are counting the oil reserves sunk on the bottom of the gulf, too.

I still see many driving around in circles. NOthing burger story about a nothing hot dog economy.

Wed, 05/01/2013 - 11:41 | 3518130 TahoeBilly2012
TahoeBilly2012's picture

Fire up the V 8 again!

Wed, 05/01/2013 - 12:33 | 3518419 somecallmetimmah
somecallmetimmah's picture

I've heard shaving your cat is recomended by the EPA.  Less wind resistance, you know.

Wed, 05/01/2013 - 11:45 | 3518135 Cdad
Cdad's picture

Indeed.  Falling demand for energy has been apparent for years...and yet by some mysterious force [eh hem...thanks Ben], the gas pump pain continues.

Fabulous thing...this crony capital Banana Tree Republic America.  

Wed, 05/01/2013 - 11:49 | 3518175 Smegley Wanxalot
Smegley Wanxalot's picture

No pain, no ... uhhhh ... gain. 

That's what I heard once.

Wed, 05/01/2013 - 12:04 | 3518275 duo
duo's picture

Obama said he would cut carbon emissions by 15%.  That's pretty easy to do if you contract the economy by 15%, which has happened in real (non BLS) terms.

Wed, 05/01/2013 - 11:44 | 3518144 Cursive
Cursive's picture

I don't see as much traffic in my little town.  Seriously.  Also notice that the main drag has been suspiciously (and welcommed) quiet at all times of the day.  Today being the first day of the month, I was thinking we might have an SSA/EBT-induced traffic pick-up, but ain't seeing it yet.  The quiet is very nice.

Wed, 05/01/2013 - 11:47 | 3518174 camaro68ss
camaro68ss's picture

Lucky, I've had a slight up tick in traffic here in Silicon Vally.

Wed, 05/01/2013 - 12:18 | 3518345 Cdad
Cdad's picture

I also have been able to feel the ongoing recession in terms of traffic on the roads...or the lack thereof.

Wed, 05/01/2013 - 12:49 | 3518469 WarPony
WarPony's picture

they all came to Houston ... bad enough with the texters and cell phone junkies, esp the illegals with a bumper sticker that says "My last Car was a _______ (burro, rickshaw, camel, etc...).

Wed, 05/01/2013 - 11:44 | 3518146 caimen garou
caimen garou's picture

there is your fucking recovery dictator o, oh yes we can!

Wed, 05/01/2013 - 12:08 | 3518185 derek_vineyard
derek_vineyard's picture

 

 "I’m asking you to believe. Not just in my ability to bring about real change in Washington . I'm asking you to believe in yours."

Wed, 05/01/2013 - 12:16 | 3518347 azzhatter
azzhatter's picture

Fuck You Obama

Wed, 05/01/2013 - 13:14 | 3518612 somecallmetimmah
somecallmetimmah's picture

That's what she said.

Wed, 05/01/2013 - 11:46 | 3518147 Enceladus
Enceladus's picture

Back to levels not seen 6 months before we invaded Kuwait

Wed, 05/01/2013 - 11:47 | 3518179 Edward Fiatski
Edward Fiatski's picture

Could also be in preparation of the next major war.

Wed, 05/01/2013 - 12:13 | 3518322 Rainman
Rainman's picture

Average U.S. gas prices 1990-1999 = $ 1.10

Average U.S. gas prices 2000-2009 = $ 1.65 to $ 4.00

http://www.buzzle.com/articles/gas-prices-history.html

Just a coincidence ? Commodity Futures Modernization Act 2000 signed by Bubba Clinton on his way out the White House door.

Wed, 05/01/2013 - 13:39 | 3518764 marathonman
marathonman's picture

Saudis getting pissed about getting payed in increasingly worth-less dollars demand more dollars for their real goods.  I'm not sure there should be a great mystery about this.

Wed, 05/01/2013 - 11:46 | 3518152 CheapBastard
CheapBastard's picture

Brake moar windows...

Wed, 05/01/2013 - 11:47 | 3518153 alex_g
alex_g's picture

"

Crude Inventories Surge To Record High As Energy Demand Collapses"

 

The "surge" is entirely explained by increased imports, not reduced demand.  Read the full report 

 

http://ir.eia.gov/wpsr/overview.pdf

 

 

Wed, 05/01/2013 - 11:51 | 3518182 caimen garou
caimen garou's picture

.gov = .fubar!

Wed, 05/01/2013 - 11:59 | 3518245 haskelslocal
haskelslocal's picture

Did you read the report?

It says Net Inports Down -12.7%.

It says Domestic Production Alaska Down -6.8%

Lower 48 production up 24.3% which must be coming from ND and fracking. 

 

Wed, 05/01/2013 - 12:07 | 3518289 CrashisOptimistic
CrashisOptimistic's picture

All oil is not created equal.

"Oil" coming from shale is mostly a blend of natural gas liquids with a bit of crude included.  It's a very tough problem in terms of definition.  Even oil itself has different API ratings defining weight per unit volume.

The parameter that matters is joules.  North Dakota "oil" is not as energy dense as that from most conventional fields.

Be all this as it may be, it is not decisive for the collapse in demand.  That's all failed economy. 

Wed, 05/01/2013 - 12:18 | 3518340 haskelslocal
haskelslocal's picture

I appreciate the insight. It figures a govt report wouldn't weigh apples to apples.

It'd be nice to see stats that converted weighted quantities to joules and then we could extrapolate value.

Wed, 05/01/2013 - 12:49 | 3518474 DaveyJones
DaveyJones's picture

there's human "inventories," then there's geologic. Anyone who has studied peak oil predicted these cycles of economic collapse affecting price but always, in the big picture climbing. And Crash is right, this is about stored energy not a stretched definition of the word "oil" 

Wed, 05/01/2013 - 12:57 | 3518509 TrumpXVI
TrumpXVI's picture

Hey CrashisOptimistic,

I want to know more about the joules.

I think there is something going on there.  Back in '09, after I had started hypermiling with my '06 Prius, I was able to squeeze over 60mpg out of that puppy during the warm summer months.  I haven't been able to repeat that performance since and in fact, mpg seems to be slowly getting worse.  I have no reason to suspect the car.  It gets its factory recommended service religiously every 5,000 miles and runs great.  But so far this spring, it has become a real challenge to get 50mpg.  

I think somethings up with the quality of the gasoline.

BTW, I have documented every tank of gas now since '07 or'08.

I'm in PA and I think all our gasoline is refined from Brent, or maybe not?

Wed, 05/01/2013 - 13:01 | 3518519 DaveyJones
DaveyJones's picture

does it have ethanol? Even if they don;t admit it, you're probably right.

Wed, 05/01/2013 - 13:47 | 3518795 TrumpXVI
TrumpXVI's picture

There IS an ethanol component.

Wed, 05/01/2013 - 14:21 | 3518986 CrashisOptimistic
CrashisOptimistic's picture

10% of your tank is ethanol.

ethanol has nowhere near the joules per gallon that gasoline does.

See if your numbers are consistent with that, and keep in mind ethanol may be causing cumulative other engine degradation.

Wed, 05/01/2013 - 14:48 | 3519161 WTF_247
WTF_247's picture

Engine degradation is what is wanted.  You have to replace the car now.  They would go bankrupt if the car lasts too long so they backdoor it to ruin the engine from the inside slowly.  GM inventories are waiting .....

Wed, 05/01/2013 - 15:33 | 3519367 DosZap
DosZap's picture

Engine degradation is what is wanted. You have to replace the car now. They would go bankrupt if the car lasts too long so they backdoor it to ruin the engine from the inside slowly. GM inventories are waiting .....

 

Exactly what E15 would, was doing to many newer cars.And it was/is not covered under warranty.Use E15 at your own peril, big repair bills coming your way.

Wed, 05/01/2013 - 12:18 | 3518341 alex_g
alex_g's picture

Of course I read the report.  Net imports are down 12.7% year over year.  The "surge" being talked about is week over week.  Look at the bottom of the first page.  Week over week, net imports are up 908K barrels a day.  Multiply that by 7 and tell me what you get.

Wed, 05/01/2013 - 12:31 | 3518413 haskelslocal
haskelslocal's picture

The chart above in the main article does not speak to week over week (Dates back to 1990) so we must be looking at it differently. I see a "surge" over the last few years. 

Looking at line 4, Net Imorts Crude Oil I find a 602 increase. Adding line 21 Other Supply of 306 gets a total of 908. Not sure why you're including Ohter supply when talking about oil nor why you are asking me to multiply by 7.

Thanks for the report though! Really appreciate it.  

Wed, 05/01/2013 - 13:02 | 3518565 alex_g
alex_g's picture

The article is in response to today's inventory build report and blame crashing demand as the culprit.  I was merely pointing out that this is not the case.  I'm asking you to multiply the increase of daily net imports and multiply by 7, which gives us the weekly increase, which you then can compare to the weekly build.  This shows that the entire weekly build in oil inventory can be explained by the increase in imports, not "crashing demand".

 

Yes, there is long term demand destruction coupled with increased domestic production that has cut net imports.  Per capita oil use is back to early 1960's levels, which has been caused by more fuel efficient cars, far less heating oil use, the disappearance of fuel oil used to generate electricity and NG and NGL's being substituted for oil in chemical production.

 

Here is a very useful page if you have an interest in this sort of data.

 

http://www.eia.gov/petroleum/data.cfm

 

 

Wed, 05/01/2013 - 13:33 | 3518731 forwardho
forwardho's picture

Sir, that link has .gov in it.

All credibility is lost with .gov

Wed, 05/01/2013 - 14:23 | 3519004 CrashisOptimistic
CrashisOptimistic's picture

Heads up.

Some imported oil is refined in the US and the refined product (gasoline or whatever) is shipped back to where the oil came from.  For example Venezuela has little refining capacity for their difficult oil.

The US Gulf coast can handle this, does so, and ships back to Ven.

This means some import number isn't US consumption, but it also means some "refined product export" is not from US crude.

Wed, 05/01/2013 - 14:53 | 3519176 WTF_247
WTF_247's picture

A lot of the refiners have figured out there is more profit to be had by importing oil, refining it and then re-exporting.  This is better for them but worse for US citizens through higher prices.  The govt does not really care or they would put a stop to that game.

Wed, 05/01/2013 - 15:43 | 3519427 alex_g
alex_g's picture

That's why I always look at the net imported oil and products number...

Wed, 05/01/2013 - 15:33 | 3519351 DosZap
DosZap's picture

http://ir.eia.gov/wpsr/overview.pdf

 

You lost me at this link.

Believe nothing you hear, and half of what you see.

Wed, 05/01/2013 - 11:47 | 3518158 resurger
resurger's picture

Must liberate Iran

Wed, 05/01/2013 - 12:13 | 3518304 FeralSerf
FeralSerf's picture

Must stop Iran from selling oil too cheap. They're ruining the market.

Wed, 05/01/2013 - 11:45 | 3518159 fonzannoon
fonzannoon's picture

so energy prices drop. Bullish right?

Wed, 05/01/2013 - 14:55 | 3519183 WTF_247
WTF_247's picture

No no no.

 

Drop is bullish.

Gain is bullish.

Flat is bullish.

 

Now that you have the code right get in there and buy buy buy.

Wed, 05/01/2013 - 11:45 | 3518161 The Dancer
The Dancer's picture

But when will real journalists stop the false narrative of "green" anything...the real shoots need to be shot...or did I spell that wrong?

Wed, 05/01/2013 - 11:49 | 3518166 Edward Fiatski
Edward Fiatski's picture

Confirmed in this - http://www.dryships.com/pages/report.asp

Ten-phucking-Grand to hire a Capesize tanker/cargoship? There's no global demand for anything.*

GET FUCKED!

*World War III comes next to alleviate the problem. Just like last time, and the time before that, and the time before even that.

Wed, 05/01/2013 - 11:46 | 3518167 buzzsaw99
buzzsaw99's picture

I own part interest in a hole in the ground. Yes, it is just a hole, a very deep hole, and if you yell down into it someone in China can hear you. It hasn't produced anything worthwhile in twenty years, much like the bernank.

Wed, 05/01/2013 - 11:46 | 3518169 Hedgetard55
Hedgetard55's picture

This can't be! Peak Oil and all that.

 

the big question is how gas can be at $3.50 a gallon with demand plunging? Can you say QE and oil futures contracts, kids?

Wed, 05/01/2013 - 11:51 | 3518197 firstdivision
firstdivision's picture

Never would that be true.  We all know that QE helps people get jobs that pays them well enough that $3.50 is like a penny 5 years ago.

Wed, 05/01/2013 - 12:12 | 3518300 CrashisOptimistic
CrashisOptimistic's picture

Yeah, I can, but you must learn to say "joules per barrel".  All oil is not created equal.  NoDak oil is energy light. 

There is enormous bullshit being foisted by propaganda.

Wed, 05/01/2013 - 12:17 | 3518351 espirit
espirit's picture

Shhhh... Don't let the cat out of the bag.  The sheeple can't handle the truth.

Wed, 05/01/2013 - 12:54 | 3518495 DaveyJones
DaveyJones's picture

our country has never lied about anything to do with oil, the reserves in the ground, or anything remotely connected to countries with the greatest reserves.

Wed, 05/01/2013 - 14:55 | 3519195 WTF_247
WTF_247's picture

In case you haven't figured it out yet - correlations are switched on the fly to match the uptrend.  When one correlation breaks they move onto another.  The desired outcome is higher prices.  So they switch to whatever will help them achieve the goal.  This month it might be AUDUSD, next month its bonds, next month after its oil etc.  It does not matter what it is - anything will work as long as there is some justification to the algos to keep buying.

Wed, 05/01/2013 - 11:53 | 3518201 ebworthen
ebworthen's picture

It's all those people not driving to jobs they don't have.

Krugman and his ilk will claim it is electric and high MPG gas vehicles.

Wed, 05/01/2013 - 12:30 | 3518395 CrashisOptimistic
CrashisOptimistic's picture

Bingo.  Those 500 electric GM Volts really put a dent in the consumption of 250 MILLION cars.

If you have no job, you don't burn oil.  If an airline cuts back flights, it burns less.  Oh, and the new mileage standards?  They don't get applied for another 5 or so years.

 

Wed, 05/01/2013 - 11:55 | 3518204 youngman
youngman's picture

Must be all of the Volts and Tesla´s selling...

Wed, 05/01/2013 - 11:54 | 3518214 ebworthen
ebworthen's picture

Don't forget Fisker's!

Oh wait...

Wed, 05/01/2013 - 12:18 | 3518355 de3de8
de3de8's picture

To the people that don't need the help via the 7.5k credit that the rest of us slobs are paying for. Moar Fair.

Wed, 05/01/2013 - 11:53 | 3518210 Racer
Racer's picture

With near record highs in UK petrol prices, I drive as little as possible

Wed, 05/01/2013 - 12:01 | 3518254 Edward Fiatski
Edward Fiatski's picture

Well, that's a function of the ASS-RAMMING "DUTY"/tax, which accounts for a large section of that price, imposed on YOU by YOUR Ro-yal-ty.

Enjoy!

Wed, 05/01/2013 - 11:55 | 3518211 samsara
samsara's picture

Want to know why Oil is still ONLY at $100 +/-  a barrel?

"...a collapse in end demand for crude products not seen since the 1990s. "

Peak Oil = NO Growth.      Period.

Sure,  start the "Economic" growth.   Oil will zoom in price. 

A Cassius Clay right and you're back on the floor in a depression.   (Try getting up again punk....)

End of Growth.   Period.

 

Wed, 05/01/2013 - 12:01 | 3518240 Edward Fiatski
Edward Fiatski's picture

What little Oil the world has left must be preserved for the next World War.

Drive a Moped, Help reduce world population of useless eaters in the long term!

Wed, 05/01/2013 - 12:03 | 3518264 haskelslocal
haskelslocal's picture

NonSense.

Speak to efficiency and then speak inability to grow.

Amazing how a Smartphone computes as did a 2005 desktop, 1 million times faster than a 1970 IBM mainframe, but we're going to pretend we cannot better harness the processing power of combustion engines.

Wed, 05/01/2013 - 12:16 | 3518343 ebworthen
ebworthen's picture

One manipulates binary digits in etherspace, the other moves 3,000+ lbs. of metal.

Consider the abject waste of cell phones, smart phones, and computing devices that are in the landfill within 3 years of being produced in China with zero Environmental protections and produced mainly from petroleum substrates.

Wed, 05/01/2013 - 12:42 | 3518450 css1971
css1971's picture

Funnily enough it's all to do with heat, gasses and infinitely long tubes.

Wed, 05/01/2013 - 12:22 | 3518373 samsara
samsara's picture

Ya,  "But we got technology man....  Like there'a an app for that isn't there?"

Technology doesn't create energy,  it uses it.

 

Wed, 05/01/2013 - 12:31 | 3518397 de3de8
de3de8's picture

Yeah, the ol conspiracy that the car companies really have 200 mpg cars that run on water but the oil companies are keeping covered up. Besides not hardly the same, a solid state device vs. IC engine that does real work while maintaining ridiculous emissions standards. Yep same same. Go back to watching cartoon channel.

Wed, 05/01/2013 - 12:58 | 3518545 haskelslocal
haskelslocal's picture

You can keep your head spinning in the sand all day jack with your lunicy.

Should I laugh at your threadjack as you make things up out of thin air and try to bend an argument out of a spoon?

You and all the other jackoff, ZH munchcans who hijack everything, offer nothing and come on here to post idiot stupidity can go sit in a Hummer and proceed to Humm.

 

Wed, 05/01/2013 - 12:43 | 3518444 css1971
css1971's picture

Carnot was a bastard.

Wed, 05/01/2013 - 14:46 | 3519137 samsara
samsara's picture

That ought to be a magic act.

Carnot and 3 Laws of Thermodynamics

Wed, 05/01/2013 - 13:09 | 3518582 DaveyJones
DaveyJones's picture

that's how they want you to think.

but ask youself, why then do we do what we do over there?

why does the Supreme Court refuse to release the energy meeting notes with Cheney?

why have most first world military agenices produced reports on this subject?

How come every "terrorist" act in the last decade has a conveinient connection with petroleum countries? 

 

 

Wed, 05/01/2013 - 11:56 | 3518213 The Dancer
The Dancer's picture

Every futures market is now monitored closely...and when volume is low enough, they manipulate the shit out of it...but they would tell you if they could that it's all for the national good...better to fight them with money than bullets///

Wed, 05/01/2013 - 11:58 | 3518220 disabledvet
disabledvet's picture

Is that "chart Bloomberg" or "source Bloomber"? I'm a stickler for these things.

Wed, 05/01/2013 - 11:56 | 3518224 orangegeek
orangegeek's picture

WTI Oil monthly posted yesterday shows bearish.

 

http://bullandbearmash.com/chart/monthly-spot-wti-oil-falls-4-april-outl...

 

Next monthly support target is near $75.

Wed, 05/01/2013 - 12:28 | 3518383 oddjob
oddjob's picture

Would $CAD still be @ .995 if crude was really heading down?

Wed, 05/01/2013 - 11:57 | 3518229 Chief_Illiniwek
Chief_Illiniwek's picture

Thank god for government statistics.  How else would I know how to "invest"?

Wed, 05/01/2013 - 11:58 | 3518239 moonman
moonman's picture

Bullish!

Wed, 05/01/2013 - 11:59 | 3518247 ttown
ttown's picture

WOW epic fail for netflix today losing nearly 2000 titles and dropping mgm content, guess the house of cards is finally coming down?

Wed, 05/01/2013 - 12:04 | 3518257 rqb1
rqb1's picture

There is always MadMoney.

Wed, 05/01/2013 - 12:01 | 3518258 JamesB
JamesB's picture

I haven't seen today's data yet - the government doesn't release it on their web site for another hour.

 

However, up until today, the total product demand (fuel oil, diesel, gasoline, jet fuel) from US consumers has been running about 5-7% more than last year.  That was quite a bit faster growth than any previous year.

 

However, winter was pretty cold this year, so the growth may have been heating oil to keep the North East warm.  Summer damand will be a better indicator.

 

For the last few years, most demand growth has been coming from outside the US - the oil states, and the BRICS as they say.  Maybe that is where the demand growth has slowed down.

 

Lastly, many times, a big print in oil inventories is offset by a big decrease in gasoline and distillate stocks.  That just means oil refineries are running slow for a period - usually due to seasonal changeover or maintenance.  If that is the case, the price of oil will bounce back later in the week.

Wed, 05/01/2013 - 14:06 | 3518878 JamesB
JamesB's picture

I just checked today's data.  The build including products was huge - 13 million barrels. 

 

Most of the reason for this was a big increase in imports.  That implies that the rest of world is slowing down, and the oil finds a place in the US, where the price was sufficient to bring it in.  That is, other countries weren't bidding for it.

 

Actual US consumption for the week was flat compared to the same week last year. 

 

 

Wed, 05/01/2013 - 12:05 | 3518267 visceralman
visceralman's picture

1990 WTI Spot averaged low to mid $20's/b.....back when supply and demand mattered.

Wed, 05/01/2013 - 12:16 | 3518324 Inthemix96
Inthemix96's picture

Caution folks, thread jack.

As some of you may know, we go to the polls tomorrow for local county concil elections, and the big three liblabcon are running scared of the surging UKIP party over here.

Now I have been at work and had five live running all day and at dinner time I was informed of this, as I am A UKIP voter, (Farage folks).

According to the line up of no-neck liblabcons and a green MEP, I am now officially a racist, homophobic, climate denying, intolerant deviant, and a bit of a fruit loop idiot who is a little bit racist.

Outright propaganda used here folks from none other than the BBC.  You have been warned, do not converse with 96 as he is off the charts and just waiting for arrest.

Fucking sickening again.  Now return to your scheduled dose of ZH folks.

Wed, 05/01/2013 - 14:46 | 3519150 akak
akak's picture

Congratulations!

You have just been officially "Ron Paul'ed".

Wed, 05/01/2013 - 13:56 | 3518328 steve from virginia
steve from virginia's picture

 

 

 

People are broke, they cannot afford crude oil. This is the problem in Europe.

 

It's also the problem in Japan and beginning in China. The US ... fuggetaboutit! The US clings to the tallest mast on the sinking ship.

 

Why are people broke? High crude prices since 1999 require more credit which has its own costs. Credit has been expanding for 400 years, the costs have become immense. Right when fuel has become scarce and expsnsive, credit has also become unaffordable

 

The costs of the fuel have multiplied in ten years, but the money flows have failed to bring proportionately large amounts of new crude to market. We're stuck @ 2005 levels of output.

 

This has something to do with 'burning up all the easy-to-burn oil first. People (Hubbert) have told us the problem but we have refused to listen.

 

Meanwhile, our economic activity isn't productive, that is, it doesn't pay for itself by way of its own operation. Every activity is subsidized by loans: no loans = no activity.

 

The dynamic goes like this: the price of crude is high it puts customers on the ropes. This reduces the ability of customers to borrow which in turn causes the crude price to decline. Because credit unravels quickly, the ability to afford the high price diminishes faster than the price of fuel can decline ... any nominal price no matter how low ... is still unaffordably high. This the fuel version of Irving Fisher's 'Debt Deflation'.

 

Considering that an important fraction of our available fuel is pumped from expensive 'tight' formations and deep water, when oil prices drop this crude becomes unavailable. When enough people become broke and their oil-wasting activities non-remunerative, there is effectively no more oil to be had.

 

Energy deflation. Coming to a town/country near you.

Wed, 05/01/2013 - 17:34 | 3519834 Not My Real Name
Not My Real Name's picture

"Considering that an important fraction of our available fuel is pumped from expensive 'tight' formations and deep water, when oil prices drop this crude becomes unavailable"

Can you imagine how much worse off we'd be if the government prohibited drilling in places that are easier to exploit, like shallow coastal waters, ANWAR and other federal lands?

Oh wait ...

Wed, 05/01/2013 - 12:40 | 3518431 css1971
css1971's picture

All hail the green revolution. No longer are we shackled to fossil fuels. Solar panels, wind turbines and electric vehicles are replacing the old economy at a record rate.

Wed, 05/01/2013 - 12:39 | 3518435 Its_the_economy...
Its_the_economy_stupid's picture

What's the solution to high prices?

 

High prices.

Wed, 05/01/2013 - 12:43 | 3518442 Meat Hammer
Meat Hammer's picture

Here in the Republik of Kalifornia, the gas tax is being increased due to all of the libtards driving Priuses with coexist bumper stickers, lowering the revenue coming to the gov by using less gas.  

To recap: Libs elect commies who like to raise taxes...for the kiddies; libs drive death traps to lower fuel emmissions and use less gas; less money comes in for the kiddies; elected commies raise taxes on gas because the libs who elected them to raise taxes (for the kiddies) are costing the commies money by driving economical cars; due to driving economical cars, the libs are raising their own gas prices.  

It doesn't get much better than that.

Drive an SUV or a muscle car.  Tell a lib......It's for the children. 

Wed, 05/01/2013 - 12:46 | 3518454 JayKitsap
JayKitsap's picture

This agency needs to get in line and introduce "Seasonally Adjusted" metrics.  Otherwise, it is hard to fudge the data.

Wed, 05/01/2013 - 12:49 | 3518466 tip e. canoe
tip e. canoe's picture

Meanwhile, our economic activity isn't productive, that is, it doesn't pay for itself by way of its own operation. 

been noodling on this point of yours for a bit, steve.    thing is: there is economic activity that could be productive and could pay for itself if given a chance, but it can not because it is forced to operate under a debt-based system, as the basic assets that it needs to get off the ground are vastly overpriced.   thus, the only operations that can pay the vig are the ones that are non-"economic" which further distort the price signals.   it's like a vise that gets tighter & tighter at each turn of the screw (or rather, each flip of the paper printer).

agree that deflation (in the energetic sense of the word) is the only way out of this conundrum, even though it's completely counter-intuitive to the way our brains have been conditioned to think about "economics".

Wed, 05/01/2013 - 13:08 | 3518593 yogibear
yogibear's picture

The Wall Street boys will have to hire some arsonist again to set a fire or two to the refiners, That should raise the prices for gasoline by cutting supplies.

Wed, 05/01/2013 - 13:14 | 3518611 adr
adr's picture

I just drove by the gas station, $3.89 in NE Ohio. Station must not have got the memo that demand has collapsed and supplies are at decades high.

THANKS BEN!!!!!

Wed, 05/01/2013 - 14:45 | 3519146 WTF_247
WTF_247's picture

Gas prices have not reflected supply and demand for years.  We have had record supply for a long time - it does not do anything to lower price.  It should - but does not.  Gas simply moves based on the price of oil.  Oil down, price down SLOW.  Oil up, price up FAST.  If everyone colludes together to sell at the same price regardless of inventores then the price will just remain as it is.  If demand for gas suddenly increases I can assure you prices will react by moving up higher fast.  It would not matter that there is record inventories at all.

Wed, 05/01/2013 - 17:18 | 3519766 Lednbrass
Lednbrass's picture

Your state taxes are probably too damn high, $3.15 this morning in rural South Carolina.

Wed, 05/01/2013 - 14:35 | 3519092 Goldbugger
Goldbugger's picture

Meanwhile the Price of PETRO continues to go up. Here comes the summer grade.

Wed, 05/01/2013 - 14:44 | 3519131 WTF_247
WTF_247's picture

Oil could drop to $50 per barrel and gas prices would still be high.  I am shocked that the MSM has not figured out the grift yet.  If you take oil per barrel costs from years past and then match that up with gas prices, gas prices continually go higher for the same oil price

2005 - oil at 50, gas at 2.00

2010 - oil at 50, gas at 2.50

2013 - oil at 50 gas at 2.75

Somehow in 2008 when oil went to 140 gas barely broke 4.00 in many areas.  Now when oil approaches 100 we are above that level solidly.  If it goes to 140 again gas will be at 6.00-7.00 easily.

 

Wed, 05/01/2013 - 15:29 | 3519328 venturen
venturen's picture

FED starts buying gas....Oh Wait they already do that at the Strategic Petroleum Reserve... Record amoounts everywhere...record US export of GAS...and still the price goes up....I guess they are betting inflation!

Wed, 05/01/2013 - 16:53 | 3519675 Dre4dwolf
Dre4dwolf's picture

This is a good thing, see if inventory rises high enough, price will start to slip downwards, which means gasoline and oil becomes cheaper (with luck) and then the economy can beging an oild induced binge (and run up a bubble bonanza) until oil prices start to climb again.

 

:)

or

it could mean that the economy is on its death walk.

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