This page has been archived and commenting is disabled.
Crude Slides After API Reports Another Huge Inventory Build At Cushing
Following last week's modest inventory build, API reports another much larger-than-expected build in total crude inventories (+2.6mm barrels). This is the 9th weekly build in a row for total crude inventory but more worrisome is the 3rd weekly surge in Cushing inventories (+1.9mm build) as we warned previously, land storage fears are starting to rise.
Cushing and Total crude inventories surge...
Dramatically more than seasonally expected...
And it's filling up...3mo highs
And the reaction...
Probably not a great move for stocks...
Charts: Bloomberg
»
- 313 reads
- Printer-friendly version
- Send to friend
- advertisements -
T. Boone is probably wishing he hadn't have run his mouth about $70 oil by the end of the year. His 13-F is almost comical.
The bigger the Cushing, the better the pushing (i.e. oil futures lower).
T Boone just got T-boned
So - where's my dollar a gallon diesel fuel for my old Benz ?
Still $2.79 a gallon on the Left Coast. Motherfucking thieves.
Gas is about$ 1.60 or so in OKC.
There's 42 gallons in a barrel of oil, which costs roughly $42 right now. So you're asking for businesses to ship the oil by rail or pipe for free, refine it for free, then truck it to the gas stations for free, the gas stations to sell the fuel at cost, and for the fed and state governments not to tax it at all. Okay. That will happen after you start working for free.
No, dumbass.
Left coast has ports and oil refineries too. Plus, there are these things called pipelines that have been around for a while that transport vast quantities vast distances for cheap.
Oil leases given away on publicly owned property for peanuts, pollution and oil head flare off for free, off shore headquarters to avoid US corporate tax rates, tax write offs and deferrals by states for temp jobs, just to cover a few of the egregious criminal acts to get oil into our gas tanks.
Diesel is at the bottom of refining - no real effort or energy expended to refine it and yet it sells for more than the low percentage top of the column gasoline products - what the fuck about that ?
Another news flash - a barrel of oil s 55 gallons. It contains low value, and high value refined components from asphalt to spendy designer diesel jet fuel to the benzine end of cracking - don't worry, the per gallon cost of paint thinner or white gas at 12 - 15 bucks a gallon saves big corporate from poverty just fine.
Not to mention - at $2.79 a gallon, a barrel of oil in your original scenario ends up worth $153.45 as diesel at the pumps. No one feeling any pain there, right ?
Our fucking publicly owned property gets sold back to us with taxation up the hooptie because Big Oil got all the fucking tax breaks up front, pieced off dot gov for almost free resource extraction, and someone has to pay.
So, bend over, muppets, so dot gov and big oil can boot fuck you some more for your own property, or that which got raped for cheaper from some other country's property and people.
There is a difference between business, and boot fuckery.
After income tax, state tax, sales tax, fees for licensing, insurance, toll bridges, toll freeways, and every other fee extracted from our sorry asses, we are working for fucking free, practically.
So, Big Oil cheerleader, go fuck yourself with a barbed wire baseball bat lubed with flaming napalm in celebration of your body oiled fur lined jockstrap boy toy avatar.
FIGHT CLUB FULL TILT !!!!!
See, the above comment perfectly illilustrates the wide ranging problem within this country ie. there is a whiole lot of dangerous sophomoric shit flowing out of people's mouths unchecked.
Anyone who has been in the oil business (I was until the bust a field operator performing well optimization) knows that a barrel of oil contains 42 gallons.
It is an ignorant assumption held by the majority of the uninitiated population. A 55 gallon oil drum is not the same as a 42 gallon barrel of oil. That is a fact.
It makes one wonder what other "unshakeable truths" you might also hold to that are just as bogus as your knowledge of what constitutes a barrel of oil.
-Dave
ps - bonus fact for the road .... fat doesn't make you fat ...
Like all bull shit reports this too is full of shit.
Inventory should be down due to the booming global economy and trade.
does oil burn? does war mix with oil you be the judge:
http://deadfix.com/wp-content/uploads/2013/05/Burn.jpg
The Big Dummy and idiotic price target produced by me:
$24ish by the middle of 2016.
They'll incinerate enough oil by then to keep $24 from happening. Too many vested PTB to allow it.
I'm not sure why this is so difficult to figure out. In order for oil production companies to cover expenses and service debt, they must drive cash flow which can come from either higher prices for crude and lower volume or lower prices for oil and higher volume. Everyone is in the same boat as if you can produce oil at above the variable cost of production, then you are going to pump as much as possible to make up the lost "price" revenue in the form of higher "volume" revenue. If a company still has to generate $100 million a quarter to service debt, cover expenses, etc. but now has to deal with a 50%+ decrease in price, then it is going to pump as much oil as possible to make-up for the lost revenue. These companies will continue to leverage existing wells/production to produce more and more oil as the majority of their costs are already sunk into the asset (via the drilling costs). Not until these wells begin to exhaust will you see any meaningful decrease in oil production.
This same scenario played out during the last oil price crash (1985/1986 through 1989/1990) as I was in Denver at the time and the oil price decreased from around $40 a barrel to the low teens. It basically took 2 years to see any meaningful decrease in production and really closer to 4 years to cleanse the mal-investment. But after four years and by 1990, the oil belt including Denver had felt the pain as "see through" commercial buildings were the new norm.
This time looks far worse as the battle for market share from the Middle East, Russia, the US, and smaller countries is going to be fierce. With a global economy sputtering along, alternative energy gaining market share, and an intensely competitive oil market, it's hard to see how oil is going rebound to anything north of $60 for years if not decades. Beyond outright manipulation in the market (translation, CBs and their proxies) which would make the situation even worse, $35 a barrel or less could be upon the market very soon. So much capital as been mal-invested in energy/oil production assets on a global scale that have life spans of 10, 20, and 30 years that over production could remain a problem for a generation (especially as the economy tanks again, alternative energy takes market share, and consumers become even more efficient).
While oil may experience short-term rallies of 1 to 3%, its hard to see how this ends well for a large number of highly leveraged producers that are smaller in size/scope. This of course is exactly what the market needs to cleanse, consolidate, and reward the best run companies but then again, with the Fed bastardizing basically all markets, I don't anyone really has any idea how and when this is going to end (other than very badly).
The longs are convinced that $140 oil is the new normal just like $500K houses in Las Vegas is the new normal. The money will simply fly out of a monkey's ass to pay for the skyrocketing cost of living as food, energy healthcare, taxes and everything else increase while wages stay stagnant.
I wonder what happens when you plot the price of oil and the number of quakes in OK.
Cherokee had a 4.4 today and a 4.7 a few days ago. Cushing had a 4.5 a month or two ago. Nearly 2200 OK quakes in the past year.
And we are absolutely not prepared for a big one. Which we are going to get, in that area. I can't imagine what something north of 6.5 is going to do.
I suspect the big one will be financial rather than geologic.
Can't we store the oil in an abandoned parking lot in Gary, Indiana?