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Crude Tumbles To $40 Handle After DOE Confirms Significant Cushing Inventory Build
Following last night's API-reported surprise inventory draw (but major Cushing build), DOE reports a modest (as expected) inventory build (of 252k barrels) - the 8th week in a row. Most crucially, given rising fears of the fullness of land storage capabilities, is DOE confirmed a significant 1.495mm barrel inventory build at Cushing. Total crude produiction fell a tiny amount (after 3 weeks of rising). WTI Crude oscillated a little before timbling back to a $40 handle once again - erasing the API kneejerk gains.
Another major inventory build at Cushing...
And WTI erases the algo gains overnight...
In short: "The US is the last place with significant onshore crude storage space left."
Which leads directly to Citi's conclusion: "'Sell the rally' near-term as fundamentals remain very sloppy and inventory constraints are becoming increasingly more binding."
Charts: Bloomberg
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Stawks up 80 points! Everything is awesome-er-er-er....
Sure crude oil is price plunge, but Boris is think, think, think,... is need somewhere to store all excess oil. Boris is long on barrell and is study apprenticeship for Cooper!
It sure looked like, based on the prior years data as shown, that Dec through Apr are significant NORMAL build months ... and the summer draw months look pretty weak.
I read about but don't trade oil, but if someone has a chart of actual inventory levels over a long period of time, that might be telling.
Regards,
Cooter
Are there any gas stations in Cushing? Could use a cheap fillup.
Yep, and they are all ethanol free gas.
look out below, 30's a go...
I'm going to reitterate my business plan which is to provide underground storage of the crude. We're just going to pump it back down the same drilling pipes that were used to bring it up. Not only is there guarateed to always be enough storage capacity (think about it), but all of the infrastructure is already in place.
That is actually very common. And the preference is to use salt domes. They essentially drill to the center of their (often times massively huge) salt formation and start circulating brine/ brackish water, bringing out salt, and maintaining pressure. At some point, when the dissolved hole is big enough, they start pumping oil down as well.
Natural gas is stored this way too. If you check the first three or five results from Google (at the time of this posting) you will see plenty of examples:
https://www.google.com/?gws_rd=ssl#q=wiki+storing+oil+in+a+salt+dome
Clearly this has a cost, so its ECON101 to decide how much underground storage volume (supply) is required to meet demand. Or, more simply, is this a long term trend (expand storage) or a short term trend (let producers fall on their sword - or give consumers a job so they can drive more).
Regards,
Cooter
All that matters is the pump and dump. Actual numbers are meaningless in our brave new world......
Yep, and the pump and dump in energy stocks is so obvious these days, which makes for some good trading.
And the build goes on; and the build goes on:
http://www.eia.gov/petroleum/supply/weekly/
I am sure the ramp up will come once the London markets close at 11AM EST. The dark HFT pools have been holding near the 41 handle for some time. I'm expecting the $45-46 range over the next 3-5 trading days. My take on it. then a short is in order.
Cushing now at about 80% of capacity; late January should be very interesting...
No wonder 'global warming' scares them to death. Less carbon used. Oh wait...
http://www.usnews.com/news/articles/2015/10/27/budget-deal-calls-for-sel...
WTF are these neo_clowns doing?
Doing?
Buying high and selling cheap.
Geopolitics
I <3 cheap gas.
WTI currently up .25. That sure sound like beeg plunge to me. But yes, oil prices will likely continue
under pressure esp as build "season" gets into full swing.
What is really interesting is that silver looks poised to challenge 14.00--- on the way down---
and cooper looks poised to take out 2.00 from above. At some point, those leveraged
miners are going to be the bargain of a lifetime.
Still waiting for that magic $39.00. That's when gas goes up $0.15 a gallon.