This page has been archived and commenting is disabled.
WTI Slides After API Reports Surprisingly Large Inventory Build
Following last week's huge 5.9mm draw (as entirely expected this time of year given window-dressing) expectations were for a 2.5mm barrel draw this week from DOE. However, API reported a major surprise 2.9mm barrel build, bring December's total to just 1.7mm drawdown (against a 5.5mm average draw in December). This is massively worse than expected given the seasonals (along with a 923k build at Cushing) and while WTI has oscillated up and down around $38 since the API/DOE build 2 weeks ago, it is fading on this data.
Sending WTI prices lower off $38 resistance...
Do not forget - December ALWAYS see notably drawdowns as firms lighten up inventories on their balance sheet ahead of year-end to reduce tax burdens...
And judging from history, as Bloomberg notes, it should resume as soon as the festive season is over: Stocks have built by 3.2 million barrels on average in January since 1921.
Charts: Bloomberg
»
- 42 reads
- Printer-friendly version
- Send to friend
- advertisements -
Brief fundamental behavior. Call the PPT. We need a few billion thrown at the shitshow. It must go on, after all.
<slap on the forehead>
Really? I mean....REALLY !!?? What....did these idiots really think that somehow the oil was just going to stop coming with every one balls out "Drill Baby Drilling?"
So we had a bit of a draw down last week. HELLO....OIL EXPORT BAN LIFTED. Only to make room for MOAR !!.
Next up....increase production from Iraq and especially Iran.
All the hopium in the world is not going to save the WTI price when the refiners go into annual maintenance at the end of Q1-16 when there is no additional floating storage available...
I want $29, Then I am all long.
Given there is no way demand is increasing anytime soon, you might as well watch geopolitics rather than price. Until supply is disrupted, everyone and their brother is going to pump as much as possible in order to stave off bankruptcy.
Price doesn't always reflect supply and demand, price is price. Where prices should be and where they are are two different deals.
Yeah, they are called speculators and they are also the fucktards that drove the price to $140 in 2008... You remember, right before the crash...
Since nothing seems to make sense in the "markets" any longer, I am sure the whoremasters can find some way to bang the price higher if that suits them.
FUBAR.
They've been knocking everyone's dicks in for the past 100+ years, so why not?
oil headfake after headfake afterheadfake....oil will continue to go down as: producers continue to produce, and world growth slows...a mismatch that continues to expand actually. either drillers actually stop pumping, not reducing drilling rigs, but pumps OR the middle east does. the kings and ayatollah have huge populations to control, theyre not going to stop. frackers have debt to pay and if the dont it'll cascade the whole junk and stock marktes..so they cant either. its a race to the ground, who pulls up first and avoids catastrophe? prisoners dilemma...which means they both get screwed...more revolution and stk mkt crash....but the story on cb=nbs will be that middle east crisis caused the mkt 'jitters'
Saudi Arabia has cash reserves that can probably last at least seven years. How much cash reserves do the US shale companies have...one or at best two yrs? If I'm Saudi Arabia and Iran, I pump until many of these US and Canadian companies go bankrupt so don't expect oil prices to go up until earliest late 2016. On a side note, there are a ton of smart money guys that have or will get burned because of their GREED. Humbling for sure!
I hear there are lots of "Going Out Of Business" sales in Hooker Land in the Shale Patch.
Why, if anyone can answer, does the USA continue to import 7-8 million barrels of crude per day? Isn't domestic production enough?
Refineries can only take certain grades of oil. Most US refineries are set up for heavy oil, not light WTI
Not even close. We only produce about half. Which is why ending the ban on exports makes so much sense!
Does anyone realize just how small this 2.9million barrel "build" really is compared to US consumption rates? The US burns through 20 million DAILY. So, that 2.9 million is typically gone by breakfast. Sort of puts this "glut" into perspective eh? It's all smoke and mirrors to artificially keep oil prices down to punish the russians. Strong dollar policy just adds to the pressure. It's going to end up bankrupting many north american companies and destabilizing many governments if we continue this crap much longer.
Nobody knows the storage quantum, and it is irrelevant anyway.
It is QE/ZIRP that has done this, in the recent past decennia. It has to play out. Meaning lower, pushing producers into negative cashflow before they die, unless it is a socialistic producer (most are), in which case they will continue producing even longer.
The cure is capitalism, with lower prices until lots of production is taken out, then market based interest rate, then at least a decennium for the entrepreneurs to learn the market.
Not in my lifetime.