Tag: U.S. Crude Oil Imports

Updated World Oil Forecast For April

Posted on by Robert Boslego

Robert Boslego - INO.com Contributor - Energies - World Oil Forecast


According to the Energy Information Administration (EIA), world oil production will exceed demand for much of the balance of 2018, and therefore global OECD oil inventories are projected to rise. Specifically, the EIA estimates that OECD inventories bottomed at the end of March at 2.784 million barrels (mmb) and will rise by 80 mmb through year-end, up 26 mmb from December 2017. And its projections through 2019 show another net stock gain of 34 mmb to end the year at 2.898 mmb.

World Oil Forecast

The DOE forecasts for 2018 and 2019 are based on dramatically different seasonal stock changes that occurred in 2017. OECD stocks fell by over 147 mmb from August through December, according to the latest estimates. But in 2018, it is predicting a net stock build over those same months.

World Oil Forecast

In 2019, it is forecasting a build similar to 2018, but without a first-quarter draw. Continue reading "Updated World Oil Forecast For April" →

Analysis Of The EIA Crude Oil Statistics

Posted on by Robert Boslego

Robert Boslego - INO.com Contributor - Energies - Crude Oil Statistics


According to the Energy Information Administration (EIA), U.S. petroleum inventories (excluding SPR) fell by 6.9 million barrels (mmb) last week. They stand about 52 mmb lower than the rising, rolling 5-year average and are about 149 mmb lower than a year ago. However, comparing total inventories to the pre-glut average (end-2014), stocks are 127 mmb above that average.

Crude Oil Statistics

Commercial crude stocks fell by 2.6 mmb, and SPR stocks were unchanged last week. Gasoline stocks fell by 1.7 mmb, and distillate stocks fell 2.0 mmb. Primary demand dropped 256,000 b/d to average 20.675 million barrels per day (mmbd). Continue reading "Analysis Of The EIA Crude Oil Statistics" →

Peak Oil Demand Season is Coming To A Close

Posted on by Robert Boslego

Robert Boslego - INO.com Contributor - Energies


Peak demand for crude at refineries and for products to consumers is drawing to a close this season. Together, they caused total U.S. oil inventories to drop by 49 million barrels from their peak in the week ending June 9th. Total U.S. oil inventories stand at 1.304 billion barrels in the week ending August 11th, 58 million barrels lower than a year ago.

Refinery demand for crude oil set a new record high this summer, as the 4-week trend reached 17.458 million barrels per day, 4.4% higher than last year. As depicted in the graph below, refiners will soon be dialing back their operations for maintenance, and this will reduce the demand for crude at U.S. refineries by about 1.5 mmbd.

U.S. Crude Input to Refineries

Domestic demand was relatively strong this summer, up about 2.0% from last year. Gasoline demand was somewhat disappointing, but distillate demand spiked. As shown in the graph below, seasonal demand has likely peaked and will be headed lower in the weeks and months ahead. Continue reading "Peak Oil Demand Season is Coming To A Close" →

OPEC Deals Have Effectively Collapsed

Posted on by Robert Boslego

Robert Boslego - INO.com Contributor - Energies


When OPEC announced its agreement 30 November 2016, it pledged to bring its collective ceiling to 32.5 million barrels per day (mmbd), effective 1st of January 2017. At the time, that ceiling included Indonesia, which was in the process of withdrawing from the cartel. The adjusted ceiling, therefore, became about 31.76 mmbd, excluding Indonesia’s 740,000 b/d output.

The deal was extended at the end of May for an additional nine months through March 2018. At the press conference, OPEC president and Saudi energy minister, Khalid Al-Falih, answered a question about the rising production in Libya and Nigeria. He responded by saying that other OPEC members would adjust their output accordingly to allow, for their increases.

But data throughout 2017, and most recently June, reveal no such adjustments have been made. According to Reuters, June production averaged 32.57 mmbd, about 820,000 b/d above its ceiling, as adjusted.

And Libyan production has continued to rise, topping 1.0 mmbd at month’s end. Nigerian exports are scheduled to reach at least two mmbd in August, 500,000 b/d higher than in the cartel’s base month (October 2016).

OPEC’s output in October was around 33.7 mmbd (including Indonesia). And so June’s production of 33.3 mmbd (including Indonesia) is only about 400,000 b/d lower.

Based on the above expectations for rising output in August, the OPEC deal is effectively dead. OPEC production will be back to about where it was in October. Continue reading "OPEC Deals Have Effectively Collapsed" →

Why OPEC's Cut-Extension Is Another Blunder

Posted on by Robert Boslego

Robert Boslego - INO.com Contributor - Energies


OPEC, led by Saudi Arabia, blundered when it decided to engage in a battle for market share in November 2014. It assumed it could drive American shale oil companies bankrupt and then pick up their market share.

But this strategy was destined to fail. For one thing, they didn’t take into account that American shale oil companies had hedged their future production. That protected the companies from experiencing the impact of lower prices to the extent that they had hedged.

Second, they didn’t take into account the American bankruptcy system. Companies can continue as “zombies” surviving by cutting costs to the bone, and selling assets to other companies at a discount to keep afloat. The buyers then have a lower “cost basis.”

Third, they didn’t take into account their own vulnerabilities. Sure, their national oil companies have low production costs but their oil revenues largely support the national budgets. They need high oil prices to balance their budgets, effectively making them high-cost producers (e.g., KSA about $65/b in 2017). Continue reading "Why OPEC's Cut-Extension Is Another Blunder" →