Weekly Petroleum Report - 5/11/05

BoeingBoy

Veteran
Nov 9, 2003
16,512
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This week's report by the EIA says:

U.S. crude oil refinery inputs averaged nearly 15.4 million barrels per day during the week ending May 6, down 1.7% from the same week last year. However, average daily inputs for the year so far are up 1.4% from last year.

Refineries operated at 91.8 percent of their operable capacity last week.

Despite the slight decline in refinery inputs, gasoline production increased last week, averaging nearly 8.9 million barrels per day. Distillate fuel production rose slightly compared to the previous week, averaging nearly 4.1 million barrels per day.

U.S. crude oil imports averaged 10.0 million barrels per day last week, down 267,000 barrels per day from the previous week. Net imports were up 1.4% over the same week last year and the daily average so far this year is up 3.8% from last year.

Over the last four weeks, crude oil imports have averaged 10.2 million barrels per day, which is 99,000 barrels per day more than averaged over the comparable four weeks last year.

U.S. commercial crude oil inventories (excluding those in the SPR) rose by 2.7 million barrels from the previous week. At 329.7 million barrels, U.S. crude oil inventories are above the upper end of the average range for this time of year, and the highest since the end of March 2002.

Total product supplied over the last four-week period has averaged over 20.4 million barrels per day, or 1.1 percent more than averaged over the same period last year.

Kerosene-type jet fuel demand is up 5.0 percent over the last four weeks compared to the same four-week period last year.

Imports of kerosene-type jet fuel were 39.9 million bbls for the week, which is 1% less than the previous week but 12.1% above the same week a year ago.

Now for jet fuel spot prices on 5/6/05 and (4/29/05):

NY Harbor $1.5113 ($1.4740)
Gulf Coast $1.5038 ($1.4690)
Los Angeles $1.6400 ($1.6700)

For context, here are spot crude prices on 5/6/05 and (4/29/05):
WTI Cushing $51.30 ($49.20)
Brent $49.70 ($50.61)

For comparison, today's crude prices are (1:15 PM Bloomberg quotes):
WTI Cushing $51.60
Dated Brent $48.80
NYMEX $51.20

Finally, some thoughts....

One would expect the current high domestic stockpiles of crude, added to pretty good stockpiles of gasoline, to exert significant downward pressure on crude prices. Reality, at least for the last two weeks, has been decidedly different with crude trading in a fairly narrow range - at least compared to the fluctuations over the previous 6 months or so.

It's pure speculation on my part, but part of the reason we haven't seen any significant drops may be the longer view.

The IAE issued their monthly Oil Market Report this morning (Paris time) and projects that crude supply and demand will run neck & neck this year at just over 84 million bbls per day average. While more supply can (and in some cases is planned) to come on line, a lot of that extra is so-called "sour" crude - meaning higher sulfur content and thus more expensive to turn into highly refined products like low-sulfur content gasoline. In short, all crude is not created equal.

Since the widely published crude prices (NYMEX, WTI, Brent) are "light sweet" crudes, their price may continue to be relatively high and within a fairly narrow range - unless either supply or refinery disruptions cause larger fluctuations.

OK, that ends my 2 cents worth.....

Jim
 
BoeingBoy said:
It's pure speculation on my part, but part of the reason we haven't seen any significant drops may be the longer view.

BoeingBoy:

It's PURE speculation in the futures market
that is keeping prices artificially high. The
market cannot stay this high for the long
term. There is no rational reason for the
market to stabilize yet or continue higher.
 
I wonder where everyone's favorite poster is?

Certainly he has something to say about this.. He is the Pilot that told all of us
that by the middle of May Fuel Prices would be in the low 40's and that US Airways would be making so much money it would be insane..

Now I see this is posted and he's quiet.. I wonder why..

Retyping his stuff for the AmWest Merger vs the UAL merger.. Has to change his letter head..
 
SpinDoc said:
There is no rational reason for the
market to stabilize yet or continue higher.
[post="268619"][/post]​

I certainly don't know what crude will trade at tomorrow, much less next month or next year. But here are what some "irrational" folks are saying:

"Total oil stocks seem neither high nor sufficient to offset current capacity constraints and increasing future demand,'' the International Energy Agency said in a report yesterday.

World oil demand will average 84.3 million barrels a day in 2005, the IEA said, 30,000 a day more than it estimated last month.

The agency, an adviser on energy to 26 industrialized nations, lowered its estimate for first-quarter demand by 300,000 barrels a day from its April report. It raised the second-quarter estimate 300,000 barrels, raised the third quarter 100,000 barrels and left the fourth unchanged at 86.1 million barrels a day.

Crude for December delivery has been more expensive than the front-month contract since March 16, when the Organization of Petroleum Exporting Countries said it may strain to meet fourth- quarter demand, and raised its production quota to help swell global stockpiles before then.

Jim
 
SpinDoc said:
BoeingBoy said:
It's PURE speculation in the futures market
that is keeping prices artificially high. The
market cannot stay this high for the long
term.
[post="268619"][/post]​

Really? I'm sure people with any early dot-com stock from 1996 were thinking the same thing in 1999.

The speculation can go a helluva lot longer.
 
I find it interesting that every post I can remeber made by Clue is negative or doom and gloom. As a passenger he surely has an "ax to grind" and he appears to be proven wrong again regarding the company's survival.

In fact, it appears the company is about to get much bigger due to M&A activity in the immediate future.

Nonetheless, here's a new article on crude oil activity:

Oil in New York ends down more that $1 at week low

See article

Meanwhile, at 5:09 am EDT in electronic trading the June Crude Oil Futures contract was trading down 63 cents to $49.82.

Regards,

USA320Pilot
 
In today's market action Crude Oil Futures for the June contract closed down $1.91 to $48.54 per barrel.

Separately, CNN reported the "White House wants $25 a barrel oil" and its "Economic adviser says it will take time for supply to expand and prices to fall by about half".

See Story

Regards,

USA320Pilot
 
Global Jet Fuel Prices
(midpoint) as of May 12
NY Jet Barge
148.05 cts per gallon

Chicago Jet
151.05 cts per gallon

West Coast (LA) Jet
156.50 cts per gallon

European: Rotterdam Barges Jet
157.02 cts per gallon

Asia/Pacific: Singapore Kero
145.08 cts per gallon

Yep, I can see OPEC losing cutting the price in half, NOT!
 
True, but then we don't pay spot prices at the port or depot either. In the 1st quarter, our average price per gallon was 7 cents over the average spot price, and the average spot price is well above that in the 1st quarter (so far).

Jim
 
USA320Pilot said:
In today's market action Crude Oil Futures for the June contract closed down $1.91 to $48.54 per barrel.

Separately, CNN reported the "White House wants $25 a barrel oil" and its "Economic adviser says it will take time for supply to expand and prices to fall by about half".

See Story

Regards,

USA320Pilot
[post="269120"][/post]​

President Horsejacker wants oil at $25 a barrel. He also has said he wants men on mars by 2020, "peace" in the middle east, and for people to forget his military service(or lack of) in the Vietnam war. Just because the clown says he wants it to happen does not mean it will. In fact, it is more likely that the price per barrel will increase now that the Chinese and Indian economies(fueled by outsourcing and WalMart-ChiCommart) are purchasing more fuel, driving up demand. I don't care how much supply is introduced, demand will outpace it now that new first world nations have been created, bringing about furthur price increases and strain on supply.

The only way of dealing with it is....<drum roll>...conservation. Increased efficiency for both air and road traffic is the only effective way to deal with it. Dumping older gas guzzlers out of the fleet, increasing efficiencies and hedging is the only way to survive this business now.


By the way....when is this announcement on the merger coming?
 
At 12:20 pm EDT, NYMEX Crude Oil Futures were trading down 74 cents and broke below $48 per barrel to trade at $47.80. It will be interesting to see what today's end of week final settlement will be and where the security will find support, from a technical analysis perspective.

Regards,

USA320Pilot