Around The Barrel – Crude Oil Drew -7.056Mbbls and Gasoline -4.642Mbbl with a Snapback in Implied Gasoline Demand

WTI crude oil futures bounced off Tuesdays $86.53Bbl, the lowest settle since January 25 to over $88Bbl after the EIA reported a snapback on implied gasoline demand. The moving 4-week average is back to 2022 high. Crude oil stocks fell -7.056Mbbls. Cushing stocks rose +192Kbbl. Gasoline stocks drew -4.642Mbbl. Production fell 100kbbl to 12.1 mil b/d off the highest since March 2020. Hot geopolitical tensions with China and Russia’s Putin rattling their sabers about continues to fester. Meanwhile in the US SPR sales continues. US crude stocks In SPR fell to lowest since July 1985.

The past week saw a splurge with risk-on buying across assets including stocks and moving through energy assets. The latest spur was from lower CPI and PPI inflation, primarily driven by lower gasoline prices. For oil does this been the demand destruction reverts or is a temporary thing?

Cushing Storage Tanks
Cushing Storage Tanks

Big oil has been busy reporting Q2 numbers with $XOM, $CVX, $PSX, $SHEL, $BP, $OXY and Permian supremo $FANG all posting record or thereabouts profits. Central banks are aggressively raising rates, how will that affect demand? Oil continues to bustle on geopolitics.

The crude oil market overhead pressure comes with the threat of demand destruction with recession fears brought on by rising interest rates. In the past month, the Federal Reserve, Bank of England, ECB, Swiss National Bank, Bank of Canada, RBNZ, RBA, South Korea, Brazil and Mexico Central Banks have all raised interest rates. Furthermore, Russia’s President Putin continues to threaten the world with rants over world energy and food supply as he continues his attack and bombardment of Ukraine. The headline risk around the EU phasing out Russian oil by year end overhangs.

Around The Barrel Contents

Click on the links below to navigate to the relevant section.

  1. DOE & API Petroleum Storage Forecast Matrix
  2. Crude Oil Quick Summary
  3. Weekly DoE US Petroleum Storage Report Breakdown
  4. API Crude Inventories
  5. Cushing Oil Stocks
  6. Crude Imports
  7. Crude Exports
  8. Gasoline
  9. Rig Watch
  10. Crude Oil Production
  11. Weather
  12. WTI Crude Oil Futures Technical Analysis
  13. DCOT Report
  14. Option Volatility and Gamma
  15. Key EIA and CME Dates

DOE Weekly Petroleum Status Report Forecast

  • via TradersCommunity.com
  • Report Date 8/10/21
  • Release Time: Wednesday, August 17, 2022, at 10:30 A.M. (ET)
  • Crude EIA -7.056M Exp +1190k Prior +5.457M API -0.448M
  • Cushing EIA +192K Exp +916k Prior +723K API +0.250M
  • Gasoline EIA -4.642M Exp +482k Prior -4.978M API -4.480M
  • Distillate EIA +766K Exp +1657k Prior +2.166M API -0.759M
  • Refinery Utilization -0.8% to 93.50% Exp -1.3%
  • Production +200kbbl to 12,200kbpd (13.10 ATH)

Note in bbls *exp = Reuters poll est  adjusted for API shift, except Cushing

Update: PADD 3 Refinery Utilization


US Crude Oil Quick Look

We are watching the crack spreads as we saw in the earnings reports from the majors these all tightened in the past month as this chart via @pearkes

Declining open interest in crude oil futures and options driven by commercial and non-commercial traders via @eiagov

Oil prices continue to be subject to geopolitical bifurcation dynamics with sudden changes that accompanies the onset of chaos. The unexpected knock-ons continue with imperfect bifurcation with political influence and personal vagaries from world leaders such as Putin, Scholz and Biden in addition to routine crude dynamics.

East Coast diesel and heating oil inventories at fresh 32-year low (only data since 1990). The pricing hub of New York Harbor is virtually dry as oil prices continue to fluctuate with geopolitical elements and demand headwinds such as soaring interest rates, China’s COVID lockdowns, SPR releases consequences deepening all in the price matrix.

via Giovanni Staunovo? @staunovo

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The recent drop in gasoline and diesel prices at the pumps may have run its course for now with crude oil trading up and refinery margins showing signs of hitting a through

via Ole S Hansen @Ole_S_Hansen

Weekly DoE US Petroleum Storage Report Breakdown

Weekly Storage via DOE

with RonH Data ‏@Ronh and The Fundamental Angle ‏@BrynneKKelly

  Via RonH at Ron H Public Tableau Link

The Fundamental Angle with Brynne Kelly ‏@BrynneKKelly

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API Crude Oil Inventories

US petroleum (Crude, SPR, oil products) inventories in million barrels (EIA)

If Washington sticks to its current pace, the reserve will shrink to a 40-year low of 358 million barrels by the end of October, when the releases are due to stop Bloomberg reported.

Cushing Oil Stocks

Cushing, OK is the hub for the most heavily traded US oil Futures contract – West Intermediate Crude – WTI so for that reason we pay special attention to the storage there.

API Cushing Stocks

API Cushing

Weekly Update via RonH Data ‏@Ronh999

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Cushing OK Crude Oil Storage Stocks

Closer Look at Cushing with DigStic Data @DigStic

US Oil Import Export

Imports

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US crude imports by origin in kbpd (incl w/w change)

  • Canada +104 to 3455
  • Mexico -49 to 661
  • Saudi Arabia -168 to 244
  • Colombia +40 to 214
  • Iraq -18 to 163
  • Ecuador -176 to 36
  • Brazil -163 to 128
  • Nigeria +92 to 253
  • Trinidad and Tobago +150 to 150

Exports

At 1.782 mb/d (+355 kb/d m/m), Russian crude cargoes are increasingly heading to Asia, with loadings for India assessed at 633 kb/d (+310 kb/d) and direct exports to China at 812 kb/d (+129 kb/d) so far in April

“Oil exports from the US Gulf Coast are set to hit an all-time high of 3.3 million barrels per day Q2 2022, as refining capacity outages limit operators’ ability to meet demand and the US government’s SPR release boosts supply,” says @RystadEnergy

US crude exports in mbpd, a new record high of 4.548mbpd last week (EIA)
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US exports of crude and refined products in mbpd (EIA) – another week above 10mbpd

US Gasoline Consumers

Input to Refineries

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Snapback on implied gasoline demand. The moving 4-week average is back to 2022 high’s

US consumers bought +392.6 million gallons of gasoline per day last week. That is +0.6 mil YoY

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US consumers spent $1,546.1 million dollars per day for gasoline last week. That is $+302.0 mil YoY.

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US avg retail price for gasoline was $3.938 last week. That is +0.764 YoY.

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US East coast diesel inventories 32 Year Lows

New York harbor, we have a problem: US East coast diesel inventories are now at the lowest **absolute** level in at least 32 years (not just seasonal), per EIA data released. The Eastern seaboard is running on diesel fumes via. Javier Blas@JavierBlas


Rig Watch

Baker Hughes Weekly North American Rigs Report

  • US Baker Hughes Rig Count 19-Aug: 762 (prev 763)
  • – Rotary Gas Rigs: 159 (prev 160)
  • – Rotary Oil Rigs: 601 (est 604; prev 601)

US Oil Rigs w/w changes by key shale basins

  • Permian -1 to 343
  • Eagle Ford unchanged at 63
  • Williston +1 to 39
  • Cana Woodford +2 to 25
  • DJ Niobrara unchanged at 17
US oil rigs and frac spread (Baker Hughes/Primary Vision)
via @staunovo

Canada Rigs

  • Canada averaged 206 active drilling rigs this week according to data from the Canadian Association of Energy Contractors. Of those rigs, 29% are drilling for natural gas, 57% are drilling for oil, 4% for other (helium, hydrogen, geothermal, lithium, or potash), and 10% are moving.
  • Drilling activity by province is 74% in Alberta, 18% in Saskatchewan, 2% in BC, and 6% elsewhere. Precision Drilling holds the majority of the Canadian market share with 30%, Ensign Drilling with 23%, Savanna Drilling with 12%, Horizon with 6%, and Stampede Drilling with 5%. View a full breakdown of Western Canada’s rig activity. via Camtrader

US oil rigs and frac spread (Baker Hughes/Primary Vision)

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Permian Basin Rigs

International oil rigs ex North America

International oil rigs ex North America +6 m/m to 645 in June (Baker Hughes)

  • Abu Dhabi -2
  • Kuwait, India -4
  • Saudi Arabia -6
  • Oman, Peru, Malaysia +2
  • Colombia, Mexico +3
  • Iraq +6
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US Oil Production

US crude production changed benchmark May 11, 2022: Domestic crude oil production estimate incorporates a re-benchmarking that affected estimated volumes by less than 50,000 barrels per day, which is about 0.1% of this week’s estimated production total. via EIA

US Oil Field Production -100 kbpd to 12.10 mbpd (New Benchmark adj)

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Weather Watch

Gulf of Mexico


WTI Crude Oil Futures Technical Analysis

via KnovaWave @KnovaWave

US Crude Oil (WTI)

Daily:

Another big week for oil, after hitting our initial 8/8 target retest completing either a iii of (5) or (v) of 5 as marked. From there we saw a grinding ABC or 1 of 3 higher and MM recalculation higher to almost +2/8 and 161.8% Fib retest. We are in a completive mode with this impulse, it’s a question of degree on the topside, use the Murrey math 240/60 grid.

On the way up potent WTI price action indicative of 3rd wave energy highlighted by spits of the Tenkan to new highs. Recall prior to this move the completion in 5 waves (iii or i) saw heavy selling with eventual confluence kiss of death with 50dma at the top of the cloud. From there down in 3 waves, completing a C or IV? Support wasn’t found until 0-8. From there we have accelerated higher through the cloud twist. Support Kijun and Tenkan. Closed above 50dma with grid above

The key is crowd behavior to help tell the story which in energy is often around geopolitics. A great example of why we watch ABC corrections and from here we get the energy from the break being balanced. This move that was powered by 50 dma Tenkan spit of a spit – hence the fractal energies reverberations. Support is previous lows, Murrey Math levels and Fib cluster. Support is the 50dma, kijun, tenkan and prev high confluence.

Weekly: WTI crude Oil futures continued higher after corrected the sell off to the Kijun. That was after it’s measured move reversed from 7-year highs and regained them right to the top of the weekly channel with the downside open. Risk support is the grid. Long term 61.8% target fueled the spit of a spit by ABC bull flag after rebalanced Chikou sated the 5 waves. Support previous high and Weekly Tenkan & Kijun which closed turning up under the 100% to give next impulse clue after holding above 50wma after regaining energy above Tenkan and Kijun. Resistance the Murrey Math levels and previous breaks (off monthly)

These are special times, recall “After we regained the pattern 261.8% from the extreme (-$40) move. The climax of the larger acceleration lower after broke the weekly uptrend, a fractal of the sharp and all the way to all-time lows to negative pricing we have seen mirror replications.” Above we have Murrey Math time and price

What we broke…….


Crude Oil Futures Commitment of Traders

Latest ICE and CFTC Open Interest Data:

CTFC and ICE open interest:

Money managers increased their net-length in Brent crude oil futures and options by 15,164 contracts to 154,792 in the week ending July 19

  • Long-only positions rose by 16,909
  • Short-only positions rose by 1,745
  • other reportables net-length fell by 7,190

– ICE

Money managers increased their net-length in WTIcrude oilfuturesandoptions by 12,344 contracts to 227,633 in the week ending July 19

  • Long-only positions rose by 8,158
  • Short-only positions fell by 4,186
  • other reportables net-length fell by 9,386

– CFTC

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Chart: Crude net-positioning of non-commercial accounts (=managed money and other reportables) in barrels and in US dollars (Brent and WTI futures and options combined) latest value is July 5

COT on Commodities

COT on commodities covering the week to July 12 saw selling pressure from hedge fund begin to ease. The net long dropped to 900k lots, lowest since June 2020 but the 52k reduction was well below the 190k average seen during the previous four weeks.

Specs turned net buyers of crudeoil, copper and sugar with selling seen in natgas gold soybeans corn wheat and coffee. The gross position (long & short) was cut by 177k reflecting a high degree of uncertainty and vacations lowering exposures

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via Ole S Hansen @Ole_S_Hansen

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Understanding DCOT Reports

Read Understanding Commitments of Traders Reports – COT, TFF and DCOT  to help understand the disaggregated reports (DCOT) and how they break down the reportable open interest positions into four classifications:

1. Producer/Merchant/Processor/User 2. Swap Dealers 3. Managed Money 4. Other Reportables


Crude Oil Option Volatility Watch

via commodityvol.com

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NYMEX LO = Crude Oil Options First 3 Months (Live Link)

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NYMEX LO & ICE North Sea Brent BRN Crude Oil Options (Live Link)

NYMEX LO NYMEX OH NYMEX OB Options (Live Link)

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NYMEX LO NYMEX OB Options (Live Link)

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Energy Earnings Highlights for Q2 2022


Key EIA and CME Dates for WTI Crude Oil

Key EIA and CME Dates For WTI Crude Oil

From The TradersCommunity US Research Desk