Oil prices have trended trend down and continued lower after OPEC+ and demand destruction concerns. EIA data shows refinery activity fell o 3-month low and gasoline demand slid to 8.5M bpd. Positions now leads into US jobs data, and even hotter geopolitical tensions with China and Russia’s Putin rattling their sabers about. Big oil has been busy reporting Q2 numbers with $XOM, $CVX, $PSX, $SHEL, $BP 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.
Meanwhile in the US SPR sales continues. US crude stocks In SPR fell to lowest since July 1985. Is the Biden administration plan to have the Fed raising rates facilitate demand destruction? What happens if supply doesn’t overwhelm demand? With energy and inflation crisis impacting economies globally demand destruction overhangs the crude oil complex.
Last week the EIA reported US crude exports hit a new record high of +mbpd last week as oil stocks rose+4.467mbbls factoring in a SPR crude draw of -5.8 mil bbls. Cushing stocks rose +926Kbbl. Gasoline stocks grew+163Kbbl. Production rose 200kbpd to 12.2 mil b/d just off the highest since April 2020.
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.
- DOE & API Petroleum Storage Forecast Matrix
- Crude Oil Quick Summary
- Weekly DoE US Petroleum Storage Report Breakdown
- API Crude Inventories
- Cushing Oil Stocks
- Crude Imports
- Crude Exports
- Rig Watch
- Crude Oil Production
- WTI Crude Oil Futures Technical Analysis
- DCOT Report
- Option Volatility and Gamma
- Key EIA and CME Dates
DOE Weekly Petroleum Status Report Forecast
- via TradersCommunity.com
- Report Date 7/27/21
- Release Time: Wednesday, August 4, 2022, at 10:30 A.M. (ET)
- Crude EIA+4.467M Exp +1190k Prior 4523K API +2.165M
- Cushing EIA +926K Exp +916k Prior +751K API +0.653M
- Gasoline EIA +163K Exp +482k Prior -3304K API -0.204M
- Distillate EIA -2.400M Exp +1657k Prior -784K API -0.351M
- Refinery Utilization -1.20% to 90.00% Exp -1.3%
- Refinery utilization in PADD3 (Gulf Coast) 98.1%, highest since Dec18
- 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
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
Rising crude oil AND rising refinery margins pushed gasoline to a record high price and diesel near the late April record
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
API Crude Oil Inventories
US petroleum (Crude, SPR, oil products) inventories in million barrels (EIA)
The US continues draining it’s SPR to its lowest level since January 1987. Over the last 2 weeks, the US gov has injected 13.7 million barrels from the SPR into the market. Commercial oil stockpiles still fell 3 million barrels over that period.
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
Weekly Update via RonH Data @Ronh999
Closer Look at Cushing with DigStic Data @DigStic
US Oil Import Export
US crude imports by origin in kbpd (incl w/w change)
- Canada +365 to 3673
- Mexico +176 to 815
- Saudi Arabia -16 to 500
- Colombia +178 to 328
- Iraq +204 to 369
- Ecuador +93 to 243
- Brazil -67 to 211
- Nigeria -86 to 57
“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 Gasoline Consumers
Input to Refineries
US consumers bought +358.7 million gallons of gasoline per day last week. That is -51.8 mil YoY.
US consumers spent $1,503.8 million dollars per day for gasoline last week. That is $+206.8 mil YoY
US avg retail price for gasoline was $4.192 last week. That is +1.033 YoY.
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
Baker Hughes Weekly North American Rigs Report
- US Baker Hughes Rig Count 5-Aug: 764 (prev 767)
- – Rotary Gas Rigs: 161 (prev 157)
- – Rotary Oil Rigs: 598 (est 609; prev 605)
US Oil Rigs w/w changes by key shale basins
- Permian +2 to 348
- Eagle Ford +2 to 63
- Williston unchanged at 37
- Cana Woodford -5 to 24
- DJ Niobrara unchanged at 16
- Canada averaged 205 active drilling rigs this week according to data from the Canadian Association of Energy Contractors. Of those rigs, 28% are drilling for natural gas, 57% are drilling for oil, 4% for other (helium, hydrogen, geothermal, or potash), and 11% are moving.
- Drilling activity by province is 70% in Alberta, 20% in Saskatchewan, 3% in BC, and 7% elsewhere. Precision Drilling holds the majority of the Canadian market share with 27%, Ensign Drilling with 22%, Savanna Drilling with 12%, Horizon with 6%, and Stampede Drilling with 6%. via Camtrader
US oil rigs and frac spread (Baker Hughes/Primary Vision)
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
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 UNCH kbpd to 12.10 mbpd (New Benchmark adj)
Gulf of Mexico
WTI Crude Oil Futures Technical Analysis
via KnovaWave @KnovaWave
US Crude Oil (WTI)
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
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
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
via Ole S Hansen @Ole_S_Hansen
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
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