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Crude Tumbles After API Reports Largest Inventory Build In 30 Years
Who could have seen that coming? For 2 days, oil has surged on every headline (good or bad) as algo-mania created the 2nd best performance in 4 years.. and then API reports an absolutely massive 12.2 million (almost 4 times larger than the 3.4mm estimate). If this corresponds to the DOE inventory data tomorrow - this is the biggest inventory build since 1985... Crude prices are... not up...
- *API SAID TO REPORT U.S. CRUDE STOCKPILES UP 12.2M BBL
The result.
So to get this straight... we have the biggest inventory build in 30 years, and the 13th week in a row of inventory bulds (an all-time record) and oil rwtraces $1 of its epic farce $3 gain on the day!
Oh, and the cherry on top: if the EIA confirms the Cushing stockpile increase of 1.2MM tomorrow, the hub is now, according to Goldman estimates, just about 90% full!
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Can I hijack this thread from the git go and nominate Nomi Prins for president?
Do I hear a second?
I wouldn't wish that fate upon my worst enemy.
Deflationary crash is coming.
Go to safe harbors.
2015 is going to be bad for "risk on", unhedged longs all over the globe, and this dovetails nicely if it occurs in late 2015 with the 2016 Presidential Election Cycle, too.
Average Joes & Jills that went into heavy debt to finance large scale purchased such as houses, etc., couldn't have done so at a worse time with the possible exception of 2005-2007.
This is also why publicly traded corporations are literally throwing all white collar personnel at getting as many M&A deals and bond (aka debt) offerings done as quickly as possible; Fed will have to raise rates a symbolic amount this year to keep narrative of growing economy alive, yet even symbolic hike in fed funds rate is going to turn bond & equity markets upside down given the near zero lower bound rate we've been working from for 6 long years (if you know an attorney, accountant or other such type at a publicly traded, well-capitalized company, ask them about the rush to merge, acquire and float bonds).
The last time we were facing macro/global economic (and geopolitical) risks like we now see before us was in the early 1930s.
Algos vs Reality!
<gets popcorn/>
Regards,
Cooter
Very bullish for WTI.
Yep, BTFD !
Oil silver Tna and bonds are wicked widow makers over the last 2 months.....keep size low
USO closes @19.06 +3.42% - go figure?
They had better find some way to move that crude before there is no place left to put it. Otherwise, they'll have to firesale that shit, oil will tank and a lot of junk bonds will go BOOM. Then it's Katie bar the door.
...then the Fed...ooops...I mean new 'investors' (wink wink) will buy the junk bonds.
There, fixed it for ya'.
Then the time for the fed to start buying junk bonds is now, before SHTF, so that they can say nary a peep about the defaults and keep people calm. They had better buy up any CDSs on that shit too.
The job cuts are part of a companywide workforce reduct
ion that will minimize cost during this downturn in oil prices. Baker Hughes said it would cut about 7,000 jobs amid slumping oil prices.
Slumped oil prices have also hit companies such as Weatherford International PLC (NYSE: WFT). The company announced it would cut up to 8,000 jobs in the first half, mostly from the U.S. The company eliminated nearly 7,000 jobs globally just last year.
http://www.bizjournals.com/houston/morning_call/2015/04/baker-hughes-to-...
IMO, Yell'in is more of the reactionary type than Bernank. Especially, after all the buying he did. I expect a huge overreaction by year's end.
I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.globe-report.com
The question is what happens if Cushing is full? They can only go to about 95% before stopping delivery, as some of the tanks are used for transferring oil.
Does that mean oil prices go up or down? Do the E&P companies have to stop pumping and end up with no revenues? Do importers have to stop importing?
No schizophrenia here,
nothing but us orderly markets.
Hup, toop, trip, four...
It's the new MARKETS! They aways go up despite any fundamentals or news! Bullish!!!!!!!!!!!!!!!!!!!!!!
Lucky for them all the workers have those big round hardhats they can fill up.
worst since 1985 TM
HOORAY
oh wait...
Yeah, I was thinking 1985 was a heck-of-a year for oil!
Regards,
Cooter
Hooray for shorts!
My co-worker and I follow the oil markets on and off all day long. I wonder if the EIA report tomorrow comes in under 12.2 million barrels what that will do to the oil market. A good part of me thinks if they report a 8 or 9 million barrel build that this may be another reason to rip the price even higher!! "It's a build but not as much as API suggested....so that's bullish!" I can see it now....
Yup, your car veers off the road due to a blowout and you cram into an old oak tree. Your car is totaled, your nose, arm and 6 ribs are broken, your left lung is collapsed and your spleen is ruptured, not to mention other various scrapes and bruses. However, due to the fact that your iPad unexpectedly survived without a scratch, you must have had a GOOD DAY!
All this BS about meeting or missing expectations is kind of like the sharp shooter fallacy.
When I read Jessie Livermore's (auto)biography, one thing that struck me was the role of news/narratives in markets. I mean, EVERYTHING had a story, right?
Estimates are just one of the many tools in the narrative tool box to screw people who don't have the skills/deep pockets/connections to do their own research.
The macro picture is pretty straight forward; too much supply/not enough demand. And this is kind of blowing out, perhaps because one of those factors is accelerating away from the other...
And they are going to cut a deal with Iran on top of this so we can have EVEN MORE production? Hah!
The Fed so screwed the pooch on this one.
Regards,
Cooter
woof
did the pooch like it...
yes the number tomorrow will be bullish, to confound the masses Schroedinger style... i took as much off as I could A/H
here we go back in history and this is so fucking bad, i can't even describe
bad new, worst since Lehman( 2009), worst since 1985 -> next is worst from WW2 ....
I'm getting sick and tired of 2 things:
1) These market "moves" based on "fundamentals" (today was epic).
2) Little blips called "massive moves" at ZH.
Yeah, it will overflow. Just like rig counts don't matter.
ooops.
That was quick.
As long as they televise it the masses should be appeased. "Let's see the phuckers screaming in agony before the entire human race this time."
OH sheeeit...1985? The year I started working for a Local oil broker. I thought i was a hotshot sales guy, but as i look back it was the year the bottom fell out and getting customers wasnt a problem since I could undercut EVERYBODY that wanted to maintain their margins..
Time for a huge storage fire, that will solve the problem.
Looks like a lot of war-or-no-war crowd bettin to me. Rumor and propaganda machine will be working all out soon methinx.
Refiners are making record margins on the spread. They will suck up all this inventory to refine into gasoline while the going is great. Look at the utilization numbers. Moonshot coming after DoE tomorrow.
Y
You do realize that refiners won't turn a massive oil glut into a massive gas glut right???
Sure, until the glut, the floor in crude has support.
You've been out in the wilderness too long. Supposedly the refiners had saved crude last week. We're pumping and importing too much for them to keep up with.
Distillates don't have the same shelf life as crude. I think that's what you're saying as well.
Iran has a gazillion barrels of crude in storage which they couldn't sell under the embargo. When that comes online and they start pumping out of their storage, it will drive prices back to $35 / barrel (inflation adjusted) where they belong.
There's no shortage and the peak oil theories are crap with cherries on top.
Iran / Iraq are the game changers. Not to mention Lybia...
Sarah Palin (drill, baby drill) is either the dumbest bitch or she got a huge marketing deal from her former O&G bosses. Her propaganda was pretty awesome. So many bought it.
Stockpiles for war.
8
Storage won’t matter.
Is in Damascus, look how far that is from Israel...
Is in Yemen attacking the Saudi’s...
I don’t give a fuck about IS but if they close down 30% of global oil production, that storage better be as full as it possibly can.
And they know this in Washington because the builup is bigger than US production.
Yeah we'll see a 30% reduction reeeeeaaaal soon.
Sounds like a cushion for an escalation..or a a pretense for a war.
Or, a cushion for the next QE. After all, the slaves had to start paying ObamaCare premiums this year.
blue horse shoe loves UCO!
This is leveraged suckers trying to find other suckers.
Expect oil to drop $10 in one beautiful day.
Normally is there is a massive quantity of one product on the shelf, the price doesn't move up. It might at first when the seller tries to gouge the few people who are actually buying, but sooner or pater you have to unload.
The refiners who are pumping oil gasoline at a record pace better find people willing to burn it because gasoline doesn't have an unlimited shelf life. This oil glut is going to quickly turn into a refined product glut and those refined products have to move.
BUT THIS IS THE NEW NORMAL SO REFINED PRODUCTS WILL PROBABLY GO UP IN PRICE DURING A FIRE SALE!!!!!!
lolololololololololololol
maybe they can turn hydro carbons
in to corn ...
Or, into a new chemo drug.
Soon inventory build will be zero each month, bullish!
"EUR/USD has bottomed"
"USD rally is over"
"Bottom is in for crude"
I'm not buying any of those. Are sovereigns done restructuring or extinguishing debts deonominated in USD? Does the chart for EUR/USD tell you the bottom is in or we had a pause and modest counter-trend rally?
I'm actively seeking a short crude and/or long SCO position monitoring how this piece of shit reacts now that the PPT's monumental life or death effort to get it above the 10 week has succeeded . . . . . for now. Not in yet but intrigued by the risk/reward based on how it reacts over the next couple of sessions.
I've made a fortune this year, 20 contracts at a time, shorting CL..on every retracement higher. Today's retracement level: 63.96.
Tyler seem mad, he quote the goldman, but he also quote the goldman many time to tell us "rig counts don't matter", when that big lie. EIA algo still say production rise, but states say production fall back in January, EIA monthy revised to show a production fall in January now, what the truth Tyler? Do they calculate the storage with algo too and did goldman not fill enough tanker below 50 with your help?
If production fall for 3 month now and record demand in 2014, how the storage fill up?
It seems like CAD and the Peso would be getting a little love if this oil rally is for real.
And again how can inventories rise 12MB in a single week if production has flattening and demand is up? Thats 1.5 days of production that has suddenly gone into storage? Has demand changed I ask from all other data points that supports an INCREASE in demand not decline? Refinery runs could have declined but even that makes little sense as we are well past peak maintenance in Feb. So something is amiss here and Tyler refuses to start investigating as the rants on lower oil continue. Tyler you question the Fed, the govt and everything else yet you refuse to ask the tough questions here and I ask why?
Why does Tyler keep parroting crap from Goldman on this?
Any fool with an internet connection can go to the EIA website, TRRC or NDO&GD and piece together the monthly production declines.
Yet Tyler's never posted any of it. It's always the EIA weekly algo calculation or Goldman's shit.
How many times did Tyler post the rig counts don't matter lie, which he won't do any longer because the monthly data has shown that to be a goldman lie, yet he won't acknowledge it.
So he's hanging onto that last part that can't be disproven yet - storage about to overflow.
So you’re saying the EIA’s Weekly Petroleum Status Report, which has shown a steady increase in daily US oil production for the past several months, is BS, but somewhere on the EIA website is the reliable data that shows a decrease in production?
Check the EIA monthy energy review. It comes in after the states have reported production. January 2015 is lower than December 2014 which lines up with data from North Dakota and partial data from Texas. There's a February figure there, but that's a crock because the states still haven't reported, so watch that get revised down.
The weekly petroleum status is done by an algorithm because of a lag on the actual data.
If I'm wrong we'll see when the February data comes out, but everything is pointing to serious production declines.
I have no job = I need no gas.
bought 20 $ of gas today
6.666 gallons
The U.S. oil boom is moving to a level not seen in 45 years
6 April 2015, by Myra P. Saefong - San Francisco (MarketWatch)
http://www.marketwatch.com/story/the-us-oil-boom-is-moving-to-a-level-no...
Oil prices to stay lower for longer, says Goldman Sachs
7 April 2015, by Sara Sjolin - London (MarketWatch)
http://www.marketwatch.com/story/oil-prices-to-stay-lower-for-longer-say...
API oil inventories rise sharply: reports
7 April 2015, New York (MarketWatch)
http://www.marketwatch.com/story/api-oil-inventories-rise-sharply-report...
Here are some more signs of a coming recession.
http://michaelekelley.com/2015/02/20/fed-warns-of-two-bubbles/
http://michaelekelley.com/2015/03/24/stocks-could-have-worst-april-since-1970/
Here is how to prepare yourself.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Good luck!
Tumbles a whopping 1%.
There are a number of factors at work here that seem to be missed.
"If" there is a production war going on between global players (a war that is simply hypothetical), then obviously North American producers don't seem too concerned. Most completed wells are pumping hard, and even Canuck Oil sands are still producing near full capacity. I don't think most readers here realise how much room the N.A. industry has for efficiency improvements (especially Canada). The industry in N.A. is hugely inefficient and grossly over-paid, so the room for cost cutting is huge, without crippling the industry. For example ... why pay a starting rig-pig $120K a year when he'll do the work for $90 - 100K if need be ... or less. The same goes for just about any oil patch job. It's a grossly bloated stretched out of all proportion industry ... for now. It can survive huge cuts, and still pay decent wages. Industry heads are very possibly looking to realign the whole thing, where most operations can profit at $50/barrel for high quality crude and much less for heavy oils. Wages are the single biggest bloat factor. Frankly, it's about time there was a reality check.
Where I live a number of companies have recently stepped up drug testing ... and wouldn't you know it, lots of employees are simply quitting rather than get fired ... it's house cleaning time. Furthermore, industry reps are demanding, and getting lower rates on contracts. Capitalsim at work. Most patch employees I know can take a 30% cut in wages, and still out earn most any other hardhat.
Another factor being missed is that with floating storage so cheap, interests can purchase cheap product, sell it at futures inflated prices, deliver in a few months, and turn a profit. So, until all storage is filled up, the game will continue and firms will continue to profit.
Not missed by most, but still important, is the fact that a lot of crude sold today is merely being delivered at much higher than spot price ... the beauty of futures at work.
Then there is the refining industry, which in the USA is a huge exporter ... it will buy every possible barrel it can get at these prices and store it ... spreads must be huge for this industry. (just look at what you pay at the pump ... is it 50% less than a year ago? not where I live ... we've gone from $1.30/ltr to $1.00)
The biggest pain will be government revenues in oil producing regions. In Canada, Alberta will get clobbered ... but that to will cause an eventual drive for efficiency. Capitalism at work.
As for me, I'm dissapointed it's not effecting my Saskatchewan as much as I'd hoped. I was looking to buy some condos at reduced prices ... so far, no good. Maybe this summer.
Even if every pump in America stopped pumping the build will continus just not in America.
Only when OPEC cuts will it ever stop.
Peak demand has come and gone.
Believe it or not it is your money.
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Heard on CBC Lang show that the reason for high gas prices was the 'fear factor for storage of oil.' I shit thee not!
I almost fell out of the chair.
then the fellow explained that the price of gas was higher because of the price of the oil being used, the shale oil, as it was not as pure as the other oil.
Nearly fell out again.
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V-V