EIA reported crude oil stocks fell -1.356Mbbls with help from -6.194Mbbls from the SPR into the crude oil market, lowest since August 1984. Cushing stocks rose +273Kbbl. Gasoline stocks -4.728Mbbl. Production unchanged at 12.0 mil b/d off the highest since March 2020. Imports were down 0.5 mm bopd and exports were down 0.1 mm bopd from last week. Right on cue oil prices soar after OPEC+ ministers decided to cut production 2mbpd at the November production policy bouncing prices off January lows. The deal takes the side of Russia, pitting the cartel against the US and EU. Since mid-June, WTI has slumped by nearly more than 35%, leaving it up less than 7% for the year.
The soaring US dollar has had a significant impact on commodity futures, however under the engine demand and supply issues are the underlying guide. Crude oil futures prices have swung sharply between risk off selling, Russia, KSA and US policies. US CPI remains elevated with aggressive hawkish central banks are leading a persistently sharper economic slowdown and strengthening the USD.
The geopolitical framework for Crude Oil is becoming more volatile as Russia, Germany, Iran and China pursue aggressive directions. Germany in an attempt to achieve some energy independence seized the German unit of Russian oil major Rosneft PJSC. Readdressing the dependance to Russia and the disaster that has come since the Ukraine invasion has been a slow and indecisive one by Germany. Geopolitical risks remain after President Vladimir Putin said Russia would immediately stop oil supply to countries that support the G7 members o price cap on exports of Russian oil.
US crude stocks In SPR fell to lowest since October 1984 Another SPR release of 4.6 mm barrels putting stocks at 442,471 (in thousands) -28.8% from a year ago.
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
- Gasoline
- Rig Watch
- Crude Oil Production
- Weather
- WTI Crude Oil Futures Technical Analysis
- DCOT Report
- Option Volatility and Gamma
- Key EIA and CME Dates
Risk in oil prices comes from demand and supply, it used to be straight forward but with wars, sanctions and a supply chain mess it isn’t so easy. Libya is adding to the supply risk as clashes between militias spark concern the OPEC nation that has two rival governments is descending into another full-blown conflict. Iraq is also breaking into anarchy. More kindling on Russia’s President Putin threatening 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.
Energy prices remain the biggest upward contributor for input inflation. In Germany in July, it was up 105.0% vs. 86.1% in June, namely the distribution of natural gas (163.8%) and electricity (125.4%). Hot geopolitical tensions with China and Russia’s Putin rattling their sabers about continues to fester. Meanwhile in the US SPR sales continues.
Big oil reported huge Q2 numbers with Aramco, $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.
DOE Weekly Petroleum Status Report Forecast
- via TradersCommunity.com
- Report Date 9/28/21
- Release Time: Wednesday, October 5, 2022, at 9:30 A.M. (ET)
- Crude EIA -1.356M Exp +2321k Prior -215K API -1.770M
- Cushing EIA +273K Exp +283k Prior +692K API +0.925M
- Gasoline EIA -4.728M Exp +482k Prior -2.422M API -3.474M
- Distillate EIA -3.443M Exp +1657k Prior -2.891M API -4.046M
- Refinery Utilization 0.70% to 91.30% Exp +1.3%
- Production UNCH to 12,000kbpd (13.10 ATH)
- SPR release 6.19 million barrels
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
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
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
Weekly Update via RonH Data @Ronh999
Closer Look at Cushing with DigStic Data @DigStic
US Oil Import Export
Imports
US crude imports by origin in kbpd (incl w/w change)
- Canada -93 to 3775
- Mexico -257 to 598
- Saudi Arabia -67 to 422
- Colombia -140 to 72
- Iraq +82 to 202
- Ecuador -128 to 191
- Brazil +97 to 299
- Trinidad and Tobago +51 to 51
Exports
American gross exports of crude oil and refined petroleum products last week surpassed the 11m b/d mark for the first time ever. Truly, the US has become the gas station to the world @JavierBlas
US Gasoline Consumers
Input to Refineries
US consumers bought +397.5 million gallons of gasoline per day last week. That is +1.6 mil YoY.
US consumers spent $1,503.5 million dollars per day for #gasoline last week. That is $+240.4 mil YoY.
US avg retail price for gasoline was $3.782 last week. That is +0.592 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
Rig Watch
Baker Hughes Weekly North American Rigs Report
- US Baker Hughes Rig Count 30-Sep: 765 (prev 764)
- – Rotary Gas Rigs: 159 (prev 160)
- – Rotary Oil Rigs: 604 (est 603; prev 602)
US Oil Rigs w/w changes by key shale basins
- Permian unchanged at 339
- Eagle Ford unchanged at 66
- Williston unchanged at 29
- Cana Woodford +1 to 26
- DJ Niobrara unchanged at 17
Canada Rigs
- Canada averaged 216 active drilling rigs this week according to data from the Canadian Association of Energy Contractors. Of those rigs, 28% are drilling for natural gas, 60% are drilling for oil, 4% for other (helium, hydrogen, geothermal, lithium, or potash), and 8% are moving.
- Drilling activity by province is 71% in Alberta, 19% in Saskatchewan, 8% in BC, and 2% in Manitoba. Precision Drilling holds the majority of the Canadian market share with 29%, Ensign Drilling with 25%, Savanna Drilling with 13%, Horizon with 6%, and Stampede Drilling with 5%. via Camtrader
US oil rigs and frac spread (Baker Hughes/Primary Vision)
International oil rigs ex North America
International oil rigs ex North America +5 m/m to 660 in August (Baker Hughes)
- Norway, Algeria, Mexico, off China +3
- Abu Dhabi, Brazil +2
- Kuwait, Pakistan -2
- Australia -3 Indonesia -4
US Oil Production
US crude production changed benchmark September 14, 2022: This week’s domestic crude oil production estimate incorporates a re-benchmarking that lowered estimated volumes by 212,000 barrels per day, which is about 1.7% of this week’s estimated production total. EIA
US Oil Field Production UNCH kbpd to 12.00 mbpd (New Benchmark adj)
OPEC Crude Oil Production
OPEC crude oil production rose 0.6k b/d to 29.64m b/d last month with volatile Libya seeing a 380k b/d jump with KSA (+180) and UAE (+150) adding to the total. Nigeria (-70) and Venz (-160) offset an otherwise strong month that saw Covid-curbs reversed via @Ole_S_Hansen – Bloomberg Survey
Weather Watch
Gulf of Mexico
WTI Crude Oil Futures Technical Analysis
via KnovaWave @KnovaWave
US Crude Oil (WTI)
Daily: Measuring oil 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. From there down in 3 waves, completing a C or IV? Support wasn’t found until 0-8. Support is previous lows and Tenkan. Resistance Kijun and 50dma which it needs close above for a rally to get legs.
Weekly: WTI crude Oil futures have plunged more than 30% off the June highs. Despite a steep weekly sell-off and a range of nearly 11%, oil continues to trade just above the key critical zone for the fifth-consecutive week. WTI traded over $94bbl just short of the tenkan after reversing off last Tuesdays $86.53Bbl the lowest settle since January 25, only to retest that level this week. WTI spat back under the 50wma. 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. Resistance Weekly Tenkan & Kijun and Murrey Math levels and previous breaks (off monthly)
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.
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…….
The focus remains 85.61-88.01a region defined by the 2013 low, the 100% extension of the March decline and the 61.8.% retracement of the November advance. A break below opens up the objective 2020 yearly open and 2018 high at 75.35-76.87. This would become an area of interest for downside exhaustion and price inflection potentially. Initial weekly the 38.2% Fibonacci retracement of the June decline at 100.21. Broader bearish invalidation now lowered to the June high-week close / 61.8% retracement at 109.16-110
Crude Oil Futures Commitment of Traders
Latest ICE and CFTC Open Interest Data:
CTFC and ICE open interest:
Money managers reduced their net-length in Brent crude oil futures and options by 4,461 contracts to 157,873 in the week ending September 27 via ICE
- Long-only positions fell by 2,668
- Short-only positions rose by 1,793
- other reportables net-length fell by 9,111
Money managers reduced their net-length in WTI crude oil futures and options by 23,078 contracts to 169,662 in the week ending September 27 via CFTC
- Long-only positions fell by 13,255
- Short-only positions rose by 9,823
- other reportables net-length rose by 7,062
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 August 30
COT on Commodities
Money managers week to Sept 27 cut bullish #crudeoil bets in WTI (-23k) and Brent (-4.5k) by 27.5k lots to 327.5k, a six-week low. The gasoil long hit a fresh 22-month low at 44k lots while continued natgas lifted the short by 10% to -69k.
Money managers in commodities reacted to the post-FOMC USD surge and growth concerns by cutting bullish bets across most of the 24 contracts tracked. Led by crudeoil, hogs, corn, soybeans, gold and copper. Small buying in wheat and sugar. via Ole S Hansen @Ole_S_Hansen
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
via commodityvol.com
NYMEX LO = Crude Oil Options First 3 Months (Live Link)
NYMEX LO & ICE North Sea Brent BRN Crude Oil Options (Live Link)
NYMEX LO NYMEX OH NYMEX OB Options (Live Link)
NYMEX LO NYMEX OB Options (Live Link)
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