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Crude Turmoils After DOE Confirms Surprise Inventory Build & Production Increase
With the crude market on tenterhooks since API reported a huge surge in inventories (especially at Cushing), DOE reported a considerable 4.2mm barrel build (less than API's 6.3mm) but way above analyst expectations of a modest draw (7th week in a row). Cushing saw a very significant 2.24mm barrel build (API 2.5mm). Crude Production also rose near 3mo highs, putting firther pressure on crude prices which are whipsawing wildly on this data...
The imports breakdown:
- U.S. imports of Canadian crude 3.02m b/d for wk ending Nov. 6 vs 2.77m b/d previous wk, according to preliminary EIA data.
- Saudi Arabia 1.11m vs 865k
- Venezuela 944k vs 595k
- Mexico 637k vs 688k
- Iraq 401k vs 521k
- Colombia 264k vs 176k
- Ecuador 133k vs 263k
- Angola 79k vs 209k
- Nigeria 47k vs 18k
- Total U.S. imports of crude at 7.38m vs 6.94m
- PADD 3 imports at 2.92m vs 2.54m
- PADD 1 imports at 526k vs 654k
- PADD 2 imports at 2.31m vs 2.17m
Inventories rose for the 7th week in a row
And soared at Cushing...
Production rose for the 3rd week in a row to 2mo highs..
The reaction in crude is turmoil...
But the trend is clear..
Charts: Bloomberg
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D'OH!
What in the sam hell.
15 second chart!
Laugh my fucking ever loving ass off!!!!!
No worries, there's a solid floor at zero.
hell no...we can go negative oil prices! Obama/Hillary will pay you to drive!
This will equate to the UE rate dropping a full 1% as more lay-offs are imminent and wages are set to reach the moon according to magic US accounting data.
No. Crude is now right back where it was when the report came out. Everything is FINE!
Go shopping to support our troops...
Fill your tank and drive around aimlessly, its for the children......
Maybe the fed can get us to negative oil prices.
Yea, lots of job openings.
The problem is the wages are to low to pay a car note, which in turn, would buy gas.
Hence Oil price decline.
http://www.phrases.org.uk/meanings/on-tenterhooks.html
http://www.eia.gov/petroleum/supply/weekly/
Inventories now at 487mill barrels. Compare that w/ 492mill barrel peak in April.
Refinery capacity utilization at 89.5%.
And the build goes on; and the build goes on.
https://www.youtube.com/watch?v=umrp1tIBY8Q
^ THIS is what will send us <$35
And it doesn't even account for the total unavailability of 'mobile' storage on the seas/various pipes
Last year at this time Cushing was at 32% of capacity, and today stands at 78% of capacity. If history repeats, we'll see an unrelenting build in Cushing for the next five months, although it would likely reach full capacity by the end of January. The cost to send oil from Cushing to the Gulf coast is about $2-4/barrel, so watch spot prices drop there when we inch closer to the “all-full” level.
DO YOU SEE WHAT HAPPENS LARRY?
Was lucky to sell my WTI clong ontracts at one of those crazy millisecond peaks. Waiting for sub-$40 at this point for another buy.
NORP
Negative Oil Rate Policy...
Put rail tanker cars on conainter and barges and filling those up with crude.
As we learn today (thanks Hedgeless!) the storage discussion is a facade; there is monster amounts of oil floating off the docks. If they were to empty the tankers into Cushing like the shippers want, WTI (indexed against Cushing) would implode. This signal in the market would spark a massive panic.
They are keeping the lid on, as usual.
My 2 retrievers and Walter my Harris hawk were surprised. But in all honesty they admited they have not been following crude market rather the field mice and rabbits have been more interesting.
SURPRISE. the entire tar sand and frack industry is going bust within 12 months and bond holders will be taking massive losses..........oh wait....no one takes losses any more, so, SURPRISE, the fed will expand its balanace sheet again and buy all of that junk as well, you know, for the greater good.
Here's the weird part: imports up 2.5% year over year. Why are crude imports up when we have so much oil?