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EIA Crude Inventories & Production Surge To Record Highs
Between European uncertainty and last night's massive API inventory build (14.3mm barrels), Brent and WTI crude was sliding into today's inventory data - well off the kneejerk highs at the US equity open (and back under $50). Market participants expected a US crude inventory build of around 3 million barrels but the number more than doubled that at 7.72 million barrels and production soared to new record highs.
- *CRUDE OIL INVENTORIES ROSE 7.72 MLN BARRELS, EIA SAYS
- *U.S. CRUDE OUTPUT ROSE 0.585% TO 9.280 MLN B/D, EIA SAYS
Idiot algos kneejerked higher (because 7.72 is lower than 14.3?) but that insanity is fading fast...
This is the 6th week in a row of inventory build...
Record high crude inventories
For those banking on production slowing and inventories being drawn down at some point, we suggest you look away... Crude inventories in the last 6 weeks have risen at the fastest pace in 14 years and 2nd fastest pace in history...
Production surged to record highs...
It seems WTI is sitting at a crucial support level...
This will do nothing to help the WTI-Brent spread which has soared to almost $10 (as the refinery strike and storage capacity limits in the US contest with Libya disruptions across the pond).
Charts: Bloomberg
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This just has to turn the indices all green...
#OIL - 20?
Reuters on OIL:
http://tersee.com/#!q=oil+reuters&t=text
After six years of no jobs, people are getting used to staying home a lot more now.
And they're finding out how much money they don't have to spend on gas, tires, oil changes or all the shit at WalMart.
So expect a LOT of gas stations, tire shops and car dealers to close up around you soon.
Now that a pattern has been identified I expect it will not follow it and dump to the low 40's maybe sub 40 this will squeeze all the futures traders.
Feb 19, 2015,
Offshore drilling giant Ensco PLC (NYSE: ESV) began cutting hundreds of jobs on Feb. 17 in Houston and beyond amid the ongoing crash in oil prices.
http://www.bizjournals.com/houston/blog/drilling-down/2015/02/exclusiveo...
'Some Folks are getting cut.' My poor uncle just got his notice; 36 years as mechanical engineer with only two companies. Luckily he has saved up for a "rainy day." He said he's going to need it.
Transocean (RIG) recently announced it plans to slash its dividend by approximately 80%. That is a major cut.
Not just that headbanger. A lot of oil production goes into industrial and commercial uses i.e Chemicals, farming etc. but the various sectors are being smothered and the government is doing the best to make it much worse.
Hmm, I think a lot of miltary equipment runs on petroleum and petroleum by-products. Could there be a connection? I mean, China is also loading up on oil, too.
Yes. As history shows, under such conditions on the ground, "low prices" becomes shortages overnight.
I think when all the signs are added up the arrow points towards something very nasty on the horizon. Little shit like Japan updating their constitution to allow for offensive capabilities, the Poles moving 90% of their ground forces to within a few miles of their eastern border, the US upgrading naval bases in Australia, the air force encounters with the Russians, NATO beefing up air power, A-10s making a comeback, the currency debasements, the dollar zig-zagging, oil going in the crapper, Jordan bombing Libya, strange bedfellows everywhere.
Disco Inferno
Like I said a few weeks ago flirting with the 10 week MAs and some teasing but no full blown penetration and breakaway move. Da Boys desperate to unload positions on Pisani'ed Kool Aid punchdrunk fresh meat.
We could see a 45 million build and bulls would still rush in to buy. Every one of them has bought his imaginary Ferari on oil going to $100. Nothing but the coldest bucket of water will wake delusional bulls from their stupor.
Like I said a few weeks ago flirting with the 10 week MAs and some teasing but no full blown penetration and breakaway move. Da Boys desperate to unload positions on Pisani'ed Kool Aid punchdrunk fresh meat.
Idiot algos indeed!
I watched and laughed how oil increased $1 in 1-2 minutes on double than expected inventories. I remembered an earlier article from ZH: "WTI just went algo-plectic". Very funny!
I hope it will break the $50 support and plunge into the 40s again soon!
How come oil price insanity fades fast while equity and bond price insanity just gets stupider and stupider? Why does logic apply to the real and not the paper?
I don't think you understand or appreciate how fascism/corporatism works.
No I get it, it was rhetorical.
Good, with a consumption rate of over 18 million barrels per day, we can use it, eventually.
Great irony is bulls are preventing capitulation, producers can produce more and longer due to $50+ price. Inventory will get way out of hand, all while bulls confused by continual build up. If only they knew how to read, lower price = need for more production to maintain revenues. Bulls think producers will slit their own throats by cutting production. No chance.
You do realize equity and debt are drying up for producers right? Add to that the fact that you have to spend $$ to produce more to maintain revenues and at some point you have to cut, you save cash to "weather the storm" by slashing G&A i.e. layoffs and getting creative in accounting. Now for the big boys you might be right but for most producers you can't just produce your way to revenue without cash on hand and most don't have much cash.
This is way out there but maybe not...
is it possible that our beloved "leaders" are now getting the EIA involved in fudging the numbers? Keep reporting HUGE inventory builds and huge production levels, keeping the price of crude extra low, thereby continuing the effort to destroy Russia's economy?
Possible?
I tend to think you are onto something, let's face it the EIA is almost worthless and staffed with the dumbest mother fuckers in the industry, they can easily be used as a tool for something like this. At somepoint you can't keep adding record inventories if the drill bit isn't turning, most US oil is from shales and those things deplete FAST!
Simple...just do the opposite
Not to brag or anything but I called this oil bear market to the day.
http://freegoldobserver.blogspot.ca/
It will be years before we see oil bounce to lofty highs again.
You overlook one thing; the Langley/CIA operatives stationed near an oil well, refinery, and shipping lane near-by. Just waiting on the orders to disrupt supply since demand cannot be.
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Also, oil must go up unless the Central Banksters are ready to let this thing blow since the derivative exposure comes to fruition by mid-May. Of course Greece and/or the Ukraine issue may take care of that anyway.
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I believe once the DOW hits 18,355, then it will correct to 17,200 or maybe a total 20% plus correction. God, literally only knows.
Oil the new carry trade!!
The Fed is on the bid.
TheFed is on the ask.
Its all about control!!
DAX made a fresh new ATH this morning, please dont tell me you guys are still shorting...
I wouldn't touch this absolute shitshow of a whore 'market' with Mr Laheys drunken syphilitic cock!
But but but $50 handle, doom and gloom. Sputtering out nonsense headlines faster than Al Gore can remind us all about hockey stick global warming. Better update again, the chart has moved a few more ticks, before another update will be needed when it ticks a bit more. When did you go so micro, Zero, I admired you for your Macro analysis of the numbers.
Gotta love those ZH headline writers too. A .585% production increase is now defined as a “surge”. No mention either of imports and refinery utilization contribution to the inventory increases. Just maybe when refineries start cranking out summer grade gasoline the inventory trends will change. I am sure ZH will update us.
More than double the expected build not enough for you? Now you think the summer driving season will save your ass. Truly pathetic.
The "Expected Build" could have been 500 barrels, double would be 1,000 barrels, one ice storm shutting down one well for a day's difference, you have to look at absolute numbers not "doubling"
I think the majority of forecasts show rising crude through the first half of the year then declining in the second half. When oil doesn't crater on bearish news you know the short side of the trade has played itself out. $75 by year end.
stateside
I think I saw that play out yesterday and this morning; cost me a small fortune and if I had waited 2 days; I would have made a small fortune. Patience is the hardest discipline; one who master's it finds contentment.
Facebook doesn't use much oil. Neither does Tesla, Twitter, Pandora, and every other make believe company out there, and just think of all the savings Amazon, and those 4 grilled cheese trucks will have with cheaper fuel cost. Jobs don't matter in the Jim Jones economy, now STFU and drink ur Kool-Aid.
Fuck the fucking ALGOS.
Anyone know why distillate fuel inventories are so low (besides lack of demand)?
One of the reasons is that we export nearly 25% of our daily distillate production to oversea markets.
Refinery fires, strikes, etc.
Texas Railroad Commission.
Learn it, live it, love it...
Refinery strike.
Just to put that record inventory in perspective. The US consumes almost 19 million barrels per day so that oils gone by rush hour.
I thought it was nineteen billion a day?
Anything is possible in this crazy, rigged socially engineered world.
Apparently, the market doesn't same to care about an issue that made headlines for the last 5 trading days. And what major news overcame such bold headlines...Philly fed below expectations - in line with a downward trend - unemployment dropped insignificantly and the economic expansion came in at .2, under estimates...Oh yeah...and oil is plunging again and in a downward trend.
I re-iterate "EVERYTHING IS AWESOME."
Makes perfect sense in new normal full retard.....you got record low demand, so lets up the output and have a huge inventory build! WW4 preps perhaps?
I'd be interested in seeing the inventory #'s as a percentage of storage capacity.
It would get real interesting if we started to run out of where to store the oil, other than leaving it in the ground.
My brothers new car does 70 miles per gallon, unlike the last which only did 35. Multiply that by a hundred million and there's your decreased demand.
two points 1) we had cars that would get 50+ miles per gallon in the 70's, so fucking what? 2) you really think that transportation fuel is the only thing oil is used for? Good luck with that logic.
71% of oil is used for transportation, moron, why don't you do a little research first? Logic? Doesn't seem to apply to you.
http://fresh-energy.org/2011/11/energy-101-oil/
I want to play! I want to use your logic then. Your brother bought a S?h?a?r?t? Smart Car... so EVERYONE is buying them! Good researchings!
Read up on miles driven per vehicle.
Classic pump and dump scheme. I expect the Attorney General to say something any moment now...
I didn't bother to read your link but what kind of transporation? If the bulk of that 71% is from Commuter vehicles I see your point but if we are talking about the bulk being mass transit, shipping, aircraft, sea vessels etc...well I don't see a whole lot of increased fuel economy in any of those.
What are you some kind of stup.
Crude stocks at the Cushing, Oklahoma, delivery hub rose 3.66 million to 46.26 million barrels, the EIA data showed.
At this rate, Cushing inventories should break the 50Mb barrier with next week's EIA numbers.
That will put Cushing inventories up to +70Mb by the end of March. ...
Oil, petrodollar and geopolitics related, very interesting article on Saker's blog:
http://vineyardsaker.blogspot.com/2015/02/seven-countries-in-five-years....
Oil is a bit crazy - today nutso:
http://finviz.com/futures_charts.ashx?t=CL&p=m5
Is there any data that quantifies how many jobs (approximately) are tied to each rig that is idled? It would seem that the oil patch is in for some seriously rough times if that many rigs are being idled without any apparent corresponding (yet) drop in fluids production.
Neither OPEC or America can cut production only not bring on new. But current levels are enough to flood the world.
Were not giving up market share at all. Signed Texas Tea.