This page has been archived and commenting is disabled.
Cushing Crude Build Concerns Send WTI To $47 Handle
Traders are citing Genscape data on Cushing crude storage builds and the re-opening of the Houston Ship Channel (enabling more crude imports into PADD 3) for taking away the overnight hope/hype in WTI and dragging it back to a $47 handle. It appears the June deadline continues to loom large.
Cushing storage levels are getting fuller and fuller and production shows no signs of slowing...
And WTI started to drop as soon as The Hoston Shipping Channel re-opened...
Which signals a revival of crude imports into PADD 3...
Charts: Bloomberg
»
- 8470 reads
- Printer-friendly version
- Send to friend
- advertisements -
Wake me up when its less than 40/bbl.
repeat after me "its all good" "its all good"
For those looking for other angles regarding inventory builds ...
http://www.energytrendsinsider.com/2015/03/11/is-the-u-s-running-out-of-...
Regards,
Cooter
Easy, we'll have the taxpayer build more storage tanks! Strategic!
Cushing crude concerns could cause capacity capitulation creating a cost crash in crude
largest crude storage since lehman
....seems to be a lot of "since Lehman" going around these days....
I believe that's a drink
Weekly inventories wil start to decline by May.
possible. it wont be demand driven though. it will be supply driven as producers stop producing when oil is $30.
Onstream and now ramping up production.BP/Husky up in Canada.60,000 barrels a day by 2016,approval for 200,000.
http://beaconenergynews.ca/energy-news/husky-energy-sunrise-oilsands-pro...
There's over 2200 miles of railway between Ft. McMurray and Cushing. That's more storage space that Uncle Warren can rent out.
Any graphs of storage capacity as a percentage? Storage levels approaching all time highs in volume terms but has overall capacity changed?
Cushing capcity increased from 50 milliion in 2010 to 71 in 2015....just a modest 42% increase
"Cushing storage levels are getting fuller and fuller and production shows no signs of slowing..."
pass the popcorn, please
If she can blow past 43 like a hot knife through butter, I will get the popcorn at the ready.
the oil cycle is the simplest of cycles because the production cycle lags so far behind. because the use of oil has been growing every year since it was first used any imperfections in the growth curve interrupts the supply chain. the producers don't slow production down or ramp it up because they can't respond that quickly. they wait for the market to catch up. either the economy slows down when the price of oil reflects the stretching of supply or it drops when supply temporarily outstrips demand. the price changes are dramatic in both directions.
this is a pretty normal bottom. the dramatic move was to 50. it will probably hang within the 40-60 dollar range until growth catches up to production.....later this year.
"""growth catches up to production.....later this year."""
World is going into recession. What growth would you be talking about??
You know this because? That is the story promoted here and which you believe. How many people do you know that can't find a job? My sister who is 56 lost her job at an oil company in Houston last month and immediately found another one. If you aren't even looking for a job it will find you right now. I know the meme is that the numbers are rigged but keep believing that if you want, I see plenty of people working and plenty of work still available for those that "want to work".
the west is going into recession. the east is still growing fast. china has a 7-8 trillion dollar economy growing at 5-7%. india is booming. the pacific(ex japan) is booming. and, despite the doom, there is a large sector of the economy that is doing okay. the usa and euro economies have huge structural issues that have relegated an entire generation to permanent poverty. until money is put back into the hands of the consumer the west will remain moribound. since there is no plan to do so the reality is given.
Here's what i don't get about that graph I've been seeing all over the internet in the last week. According to the EIA, there are 449Mbs in US stockpiles and only 521Mbs of total storage space in the US.. That means US storage is 86% full; not 60% as the EIA's own graph indicates.. There's only about 72Mbs of storage space left; not about 200Mb. I think someone in the EIA graphing department is being sloppy here. Inventories are a lot higher than 310Mbs and everbody knows that. ...
don't worry, it's just worst since Lehman
~120Mbs of the ~440Mbs are 'stored' in pipelines, locally, or on ships and the like (tanker trucks in Detroit), and thus not included in the amounts in true storage, such as the Cushing facility.
Maybe you should go look at the data yourself and see what you are missing. You should also understand there are over a billion barrels of storage for petroleum products and crude gets moved from it's storage to refined product storage after it's processed. Last week, refinery capacity was at 86.6%, normally it ramps up over 95% when there are large inventories of crude and it will soon again. That is why that chart shows dramatic dips. There is no past history in that chart that supports the fantasy extrapolation line that has been drawn by the moron who wrote the article.
Wrs1, I totally agree with that logic, but what is the refined products storage currently at? Is this why the refineries are not 'ramping up' as you say? Just stating the obvious does not make you right. We need a clear picture of ALL storage capacities and ALL usage rates to come up with a comprehensive picture. This will never happen so everything is just speculation......
Who gives a fuck, when the price of refined gasoline keeps going up?
Well that is because refinery utilizaiton is at 86.6% and inventories are not very high right now. When the refineries begin ramping up for the summer driving season, the builds will turn to draws. There is also a pipeline opening in April that will move 250k bbl/day from Permian to CC which will reduce input to Cushing by 2m bbl/week, that alone will eliminate the inflows that are causing the build. That pipeline is called the Cactus line if you are interested.
Go penny oil!!!!!
Nothing like a $1 spike on nothing and then rapid oscillation in a frickin $.40 range.
What absurdity.
Good volume. Somebody believes in that price.
Oil is gay.
so that is why you have to drill it and suck it up out of the ground?
well everyone knows the price is going up....so they will put ever more in storage....yep that will work well. Then OBama/Hitlery will bail them out...can't have wealthy taking a loss!
Isn't it perversely ironic that only Tertiary Wealth (paper assets) seem to have value right now -- and only US paper at that?
And isn't it perversely ironic that Primary Wealth (PM and Energy Resources) is getting crushed, when world population and its demands for modern goods keeps growing?
This seems counter-intuitive to Austrian economics theory, but there it is. For now, as in the last 6 years, the Keynesians are still winning and getting richer (wealth transferring from weak hands to strong hands).
I guess if the Consumer won't buy things (lack or full-time or decent paying jobs), then the Finance clans will buy ownership of companies that are making all these things, and are also buying Primary wealth on the cheap -- now that they've beaten down the prices.
The Wall St guys must be laughing their butts off, now that Main St has blown its wad on buying pricey PM in the last few years (with unintended help from the likes of ZH), and they can buy it for 40% off.
I don't know Tyler. Here we are producing all of this oil and yet why do you present the only choice is to stab US producers in the back? If we are EVER going to be oil independent, we have to WANT it and when the opportunity presents itself (and it's got its hands around our throat and announcing itself loudly right in our faces trying to get our attention!), the answer is to surrender to OPEC and defend the imports?
I don't get it. We don't have to cut back domestic production. We need to decide RIGHT now whether being oil independent is important or not. Whether it is better to keep funding state-sponsored terrorism via the petrodollar and OPEC than to just make a political decision to start commiting to the refineries, pipelines, storage facilities, LNG plants and more necessary to achieve that goal and become an oil exporter again. What is so bad about the US regaining control of the price of oil? Do you want chronic shortages in a world of $200 oil from our enemies or would you prefer a reliable source of $85 oil from our own backyard.? What am I missing here? What is wrong with everyone? STOP IMPORTING OIL!!!
Hooray, someone who gets it but of course you live on the ship channel and it matters to you, it doesn't to many of the sockpuppets on this site because none of them makes a living from it. Of course if you are from Pasadena Ca, then good for you for getting it without even being close to the situation.
Stop it, you are making way too much sense and more importantly you have insulted the hate America crowd with your jingoistic nationalist patriotism. /sarc/
The US can be oil independent when it can reliably produce 19 million bbl/day at or below about $30. At $85 it could be oil independent - with roughly the economic conditions of Belarus or maybe India, though 85 would still be below production cost for many fields, it wouldn't matter, as the entire energy sector would have long since been nationalized outright (see:every petrostate ever). Careful what you wish for.
Find the decades where US was relevant on a global scale. Bonus: find the point where Nixon ended convertibility and marginal utility of debt began its relentless decline. This is all a mystery to the smartest people in the room. The only thing you need to understand is the floor beneath production costs for that marginal barrel, which is just physics plus supply and demand.
http://upload.wikimedia.org/wikipedia/commons/b/b0/Crude_oil_prices_sinc...
http://upload.wikimedia.org/wikipedia/commons/8/82/Crude_oil_prices_sinc... (log scale)
"We don't have to cut back domestic production." Pretty soon it will be more profitable to leave it in the ground.
You are either completely naive, or simply don't understand how the real world works. TPTB have no interest in the US becoming energy dependent and will block any attempts at doing so (Keystone). By funding terror through petrodollars, they keep the defense sector well funded with drone contracts, weapons, surveillance tech, etc.
E-X-C-E-L-L-E-N-T
There is a $10 differential between WTI and Brent. With Houston back on line that means the refiners in PADD1 will be importing WTI instead of Brent Oil. Rail car transport of WTI is much more expensive and limited than via oil tanker. Meaning East Coast gasoline prices will level off and then drop.
crazy!
Make that a 46 handle.