Tag: Crude Oil

Will Oil Find Support Above $50?

Posted on by Chris Vermeulen

Recent global news regarding Venezuela, China, and global oil supply/production have resulted in the price of Oil pausing over the past few weeks near $53 to $55 ppb. We believe the continued supply glut and uncertainty will result in oil prices falling, briefly, back below $50 ppb before any new price rally begins. Our researchers at The Technical Traders believe historical resistance near $54~55 is strong enough to drive prices lower before new momentum picks up for a renewed price rally.

Oil

Eventually, yes, oil will rally above $55 and attempt to target the $65+ price level. Yet we don’t believe that move is going to happen right now. We believe the global uncertainty; the slowing Chinese economy and the global supply glut will result in a fundamental price decrease before any momentum for an upside price move begins. Our analysis suggests a price move back below $50 ppb, likely targeting the $46~47 level, where basing may occur. Continue reading "Will Oil Find Support Above $50?" →

World Oil Supply, Demand And Price Outlook, January 2019

Posted on by Robert Boslego

The Energy Information Administration released its Short-Term Energy Outlook for January, and it shows that OECD oil inventories likely bottomed last June at 2.806 billion barrels. It estimated an 8 barrel gain for December to 2.883 billion, 39 million barrels higher than a year ago.

Throughout 2019, OECD inventories are generally expected to rise. At year-end, EIA projects ending the year with 2.951 million barrels, 68 million more than at the end of 2018.

EIA also extended its outlook through 2020 for the first time. It projects that stocks will build another 75 million barrels to end the year at 3.025 billion. That would push stocks into glut territory.

Short-Term Energy Outlook

Oil Price Implications

I performed a simple linear regression between OECD oil inventories and WTI crude oil prices for the period 2008 through 2017. As expected, there are periods where the price deviates greatly from the regression model. But overall, the model provides a reasonably high r-square result of 79 percent. Continue reading "World Oil Supply, Demand And Price Outlook, January 2019" →

U.S. Crude Production Gains Slow In October

Posted on by Robert Boslego

The Energy Information Administration reported that October crude production averaged 11.560 million barrels per day (mmbd), up 79,000 b/d from September. This was a slowdown in growth from the spectacular numbers recorded in July and August.

Crude Production

However, the year-over-year gain was still a very impressive 1.850 mmbd. And this number only includes crude oil. Other supplies (liquids) that are part of the petroleum supply add to that. For October, that additional gains is about 600,000 b/d.

Crude Production

The gain was led by a 33,000 b/d increase in New Mexico, a 31,000 b/d rise in North Dakota and a gain of 22,000 b/d in Colorado. Weather factors affected the overall gain, as production fell by another 29,000 b/d in the U.S. Gulf. Continue reading "U.S. Crude Production Gains Slow In October" →

OPEC's Plan To Institutionalize OPEC+ Has Failed

Posted on by Robert Boslego

For over a year, OPEC General Secretary Mohammed Barkindo has been trying to "institutionalize" the OPEC+ arrangement that includes Russia. At the Oil and Money conference in October 2017 in London, Barkindo told reporters. "This platform of 24 countries, now hopefully growing, should be institutionalized."

OPEC+
Source: OPEC

In September, he said, "What we are working on now is to make it [cooperation] more permanent and institutionalize the framework. Our target is to have a longer cooperation framework in place by December when we reconvene in Vienna [for the next OPEC meeting]."

In an interview with TASS on October 22nd, Saudi Energy Minister Khalid Al-Falih explained his view for the long-term agreement he wanted in December: Continue reading "OPEC's Plan To Institutionalize OPEC+ Has Failed" →

World Oil Supply, Demand And Price Outlook, December 2018

Posted on by Robert Boslego

The Energy Information Administration released its Short-Term Energy Outlook for December, and it shows that OECD oil inventories likely bottomed in March at 2.807 billion barrels. It estimated a 10-million barrel gain for November to 2.902 billion. Though it forecasts that stocks will drop in December to 2.894 billion, that is 50 million barrels higher than a year ago.

Throughout 2019, OECD inventories are generally expected to rise, reaching 3.010 billion barrels in November. Its projections end the year with 88 million barrels more than at the end of 2018, glut territory.

oil

OPEC pledged to cut its production by 800,000 b/d from the October level for the first six months of 2019. EIA estimates OPEC production at 32.9 million barrels per day (mmbd), including Qatar, which will no longer be a member of OPEC in January. EIA’s assume OPEC production for 2019 is 31.8 mmbd, and so that represents a larger 1.1 mmbd drop. Continue reading "World Oil Supply, Demand And Price Outlook, December 2018" →