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EIA December Crude Inventories Surge To Record Highs
WTI Crude is down over 3.5%, dropping back towards $55 - dismissing yesterday's dead-cat-bounce deja vu - as EIA inventory builds more than expected at 7.27 million barrels (biggest build in 2 months to 6-month highs). This is the largest inventory for the time of year since records began. Of course, while energy stocks are fading broad equity indices do not care at all...
EIA Inventories rose most in over 2 months...
This is the highest inventory for December on record...
WTI Crude slipped once again back towards $55, remaining in the broad $54.50 to $59 range for now...
Energy stocks ripped yesterday... dropping now...
Because fun-durr-mentals...
Charts: Bloomberg
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Next year will be fun to see how the world will handel low oil prices. Happy holidays bitschezzz
But but but.........the central bankers said the economy is booming??????
Exactly.
"Loss leaders.". Refine it, stick it in the ground, sell it for a buck.
All the industial commodities are taking a shit, a strong sign the economy is in full recovery.......
A bank is going to fold because they were long oil. A big one.
Can't happen. Too big to fail, will get bailed out.
They'll just merge it with goldman sachs, who coincidentally got out of commodities over the last year.
GS will buy them for pennies on the dollar, sure.
I think you mean bailed in.
BOKF my friends. Buy puts on that small bank who is 100% affiliated with energy is oklahomos and taxas. Puts are filthy cheap
Wells Fago and Citigroup big enough for ya ?
http://blogs.barrons.com/stockstowatchtoday/2014/12/18/wells-fargo-citigroup-most-at-risk-from-lower-oil/
I think the Canadian banks are more suspect. The high cost tar sands will be the big losers if oil stays low. My understanding is that the Canadian banks have big balance sheets and very manly risk appetite. I'd bet my lunch money they've got a TON of festering soon-to-be-bad debt on their balance sheets.
hmmmm. only $35 to go....
Contango - by the cons, for the cons.
I will order more heating oil STAT ...
The tears of oil barrons are worth more than the oil itself.
Pre-Christmas pump and dump. Hold on to your candlesticks!!
Inventory will continue to build until the shale wells drilled in the last 6 months deplete. Shouldn't be more than 6 more months.
"EIA inventory builds more than expected at 7.27 million barrels"
the "expected" i saw (icn) was for a DRAWDOWN of 1.8 million barrels
Yep. Plus with winter still not here huge amounts of hydro power being produced.
Vermont Yankee goes offline next month, rolling blackouts to follow.....
Must get S&P to 2100.
Ignore low oil prices.
Just announce they've discovered Bernanke and Yellen's secret love nest. That should be good for 2500.
Good! Those MRAPS, Tanks and B-52H models use a lot of fuel!
So that's why the markets are rallying. Fuck these robo-traders.
HAHA Oh I went back and watch Pickens tell CNBC that they were full of Bull Shit again yesterday. Demand has dropped he said, rigs will close he said.
I think it's finally time to start implementing my plan. Buy UVXY after xmas is over. Oil will continue its crash which will cause a wave of panic all over the world and we're going to see massive volatility all year long. Load UVXY
Here's the kicker, though. Imports (4 week average) are up year over year! First time in a long time. Check the link:
http://www.eia.gov/petroleum/supply/weekly/
"At 387.2 million
barrels, U.S. crude oil inventories are well above the upper limit of the average range for
this time of year. Total motor gasoline inventories increased by 4.1 million barrels last
week, and are well above the upper limit of the average range."
doesn't sound like the recipe for higher prices anytime soon
The market found a new penny stock. Because it is perfectly normal for the most important commodity on earth to have multiple 10% swings up and down daily.
Kind of hard to do business when your profit margin hangs on timing a trade to the second. A company has to lay out their prices months in advance. You can't even produce if you don't know what your cost will be a month from now since input costs on base commodities might be 20% lower or higher.
The true cost of Wall Street speculators taking over commodity trading is that it has become impossible for anyone to do business. One company I worked with was almost put out of business because a factory making goods refused to produce the product that was ordered six months prior since the factories input costs rose above the quoted price and it would have lost the factory millions to produce the order. The company I worked with had already set pricing and had orders to be filled based on it. The higher production cost would have blown all profit based on that set price losing them money.
I don't think anyone on Wall Street understands the business cycle. Right now I am working on 2017 product. 2016 is done and is going out to have orders booked. Prices are set and orders will be placed. Those prices are based on factory quotes, but will not be produced until the 3rd quarter of 2015 to be delivered in Jan-Feb 2016. If the input costs rise dramatically between now and 3rd quarter 2015 the factory will have a hard time honoring the quoted price. Which is why many factories are only honoring pricing for 60 days. It is a huge gamble to sell product now based on a price that has already had its guarantee lapse. Most factories can't buy raw materials now for production that will begin in nine months. The factory's margins are razor thin, as is ours. The fat margin is held by the retailer who could easily absorb the cost.
I have a new product that has the retail set at $59.99. The wonderful big box retailer wants to pay $20. My current production quote is $13.80, leaving me with $6.20 gross profit. I must pay a 13% licensing fee and 5% commission based on the wholesale price before any other overhead is taken out of that gross. So take $3.60 out of the $6.20. After all is said and done net profit is about $1.75 per unit. You can see where a minor cost increase on the production end can spell disaster for us. Retailer gets to make $40 gross, with overhead nowhere close to what I have. I know net per unit is a lot more than $1.75. Fair deal right?
After reading this, I immediately thought of two things. Different avenues of marketing and fuck big box retailers. Without knowing more about the product, there is simply no way to do biz under this scenario. Calculating the reward depending on an efficient sales and marketing force may be far superior to parking product in a WalMart and praying production costs decline while margins improve.
Surviving, no thriving, in todays world is going to take some effort. When your opponent has the upper hand, assess his weakness, and exploit it. It is the yin and yang of all things. A fucking rock to the head, Goliath style.
MERRY CHRISTMAS !
For moros and christians.
Quiz
In which country ?
1.- The water is private.
2.- A guy guilty from insider trading can be elected as president.
3.- A guy guilty of DUI, hit and run with death can be guilty and receive 541 days jail time not in jail instead in his home.
4.- A guy from (3) have a second trial, and now is not guilty at all.
5.- Copper from the main public company, is sold in markets of futures, over the counter, underpriced , loss in the order of 5 billions
Answer- That could be anywhere in the world pal. Nothing surprises me.
The part of this that blows my mind is that it didn't happen overnight. We have had years of surging production while demand for gasoline stocks has steadily declined.
How did they manage to keep the price propped up around 100 bucks over the last few years? Where were the price drops in 2012, 2013, and most of this year?
The best part of all of this is that big oil wanted US laws repealed that would have allowed them to sell production overseas. It wasn't until that bit of greediness happened that OPEC said enough.
The other piece of this that confuses me has to do with oil priced in dollars but I shall leave that missive for another day.
Since the inventory carry is so low, the inventory tax doesn't matter and given that imports were up by a million barrels I would have to say that the Saudis or Venezuela are cutting each other's throats to give their oil away. Seems incredibly stupid to me but my goal now is to burn up as much gas at these low prices as possible. To that end I just bought a supercharged Range Rover sport that gets 11mpg.
Good thinking.
wrs1,
Congrats! It's what most people do: destroy wealth, not create it.
sorry, duplicate