[bellevue]

Overall: Neutral stats; demand is weak and distillate imports are too high, but issues in the Gulf Coast drove a big and unexpected crude draw.

Overall: Neutral stats; demand is weak and distillate imports are too high, but issues in the Gulf Coast drove a big and unexpected crude draw.

Crude: Supportive.Crude stocks drew an impressive 3.9 mmb because of Gulf Coast issues including fog and an oil spill - imports to the region were down 638 kb/d WoW. The oil spill is still impacting imports so next week could see another draw. Cushing drew by 691 kb and PADD2 by 677 kb, despite the high (1.5 mmb/d, up 298 kb/d WoW) reported levels of PADD2 imports and slightly lower refinery runs. The arb from Canada to Cushing remains firmly shut, but upgrader issues that have cut production in Canada should be resolved by February so barrels should be flowing into the Midwest just as the big spring maintenance program in PADD2 ramps up. Refiners continue to run at sub-80% utilization and product stocks are still rising. This does not bode well for margins or crude demand.

Gasoline: Neutral. Another bigger-than-expected 2.0 mmb build, but not out of line with seasonal norms. Demand remains dismal, down 0.8% from last year's already low levels (4wma). Upgrading margins have rebounded over the last two weeks so the yield has ticked back up over 62%, which will keep production high even if refiners stay at sub-80% utilization. Demand should rebound in the next few weeks unless weather gets in the way.

Distillates: Bearish. A small build vs. an expected draw as imports jump to their highest level since February 2006. The import arb needs to shut so we remain sellers of the March heating oil - gasoil arb.

[bellevue]

*api says u.s. Crude oil inventories rose 4.72 mln barrels
*api says u.s. Distillate inventories fell 1.02 mln barrels
*api says u.s. Gasoline inventories fell 1.16 mln barrels

[vferg]

Crude oil stocks increased by 4.723 million barrels in the week ended Jan. 29, the API said. Analysts polled by Platts expected a decrease of 1 million barrels. The API also said gasoline inventories fell by 1.159 million barrels while distillate stocks fell by 1.022 million barrels. Refinery utilization rose to a rate of 78.0%, up from 77.6% the previous week. The Platts forecasts were for gasoline stocks to rise by 1.5 million barrels, distillate stocks to drop by 1.2 million barrels and for refinery utilization to rise to 78.75%

[vferg]

According to the Bloomberg survey, analysts believe that crude oil inventories had a build of 400K during the week ending Jan 31 (last year crude saw a build of 7170K); expectations range from a draw of 3000K barrels to a build of 4000K (9 out of 16 analysts expect a build; 2 analysts are at unchanged); prior 4 week avg is a build of 167K... Analysts believe gasoline inventories had a build of 1400K (last year gas saw a build of 362K); expectations range from a draw of 1000K to a build of 2500K (15 out of 16 analysts expect a build); prior 4 week avg is a build of 3367K... Analysts believe distillate fuel inventories had a draw of 1150K (last year distillates saw a draw of 1361K); expectations range from a draw of 2000K to a build of 2000K; (13 out of 16 analysts expect a draw); prior 4 week avg is a draw of 466K.


Summary of Weekly Petroleum Data for the Week Ending January 29, 2010

U.S. crude oil refinery inputs averaged 13.5 million barrels per day during the
week ending January 29, 163 thousand barrels per day below the previous week's
average. Refineries operated at 77.7 percent of their operable capacity last
week. Gasoline production decreased last week, averaging 8.6 million barrels
per day. Distillate fuel production decreased last week, averaging 3.5 million
barrels per day.

U.S. crude oil imports averaged 8.4 million barrels per day last week, up 559
thousand barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged 8.4 million barrels per day, 1.4 million
barrels per day below the same four-week period last year. Total motor gasoline
imports (including both finished gasoline and gasoline blending components)
last week averaged 926 thousand barrels per day. Distillate fuel imports
averaged 438 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased by 2.3 million barrels from the previous week. At
329.0 million barrels, U.S. crude oil inventories are above the upper limit of
the average range for this time of year. Total motor gasoline inventories
decreased by 1.3 million barrels last week, and are above the upper limit of
the average range. Finished gasoline inventories increased while blending
components inventories decreased last week. Distillate fuel inventories
decreased by 1.0 million barrels, and are above the upper boundary of the
average range for this time of year. Propane/propylene inventories decreased
by 2.9 million barrels last week and are below the lower limit of the average
range. Total commercial petroleum inventories increased by 0.7 million barrels
last week, and are above the upper limit of the average range for this time of
year.

Total products supplied over the last four-week period has averaged 18.8
million barrels per day, down by 2.0 percent compared to the similar period
last year. Over the last four weeks, motor gasoline demand has averaged 8.6
million barrels per day, down by 0.5 percent from the same period last year.
Distillate fuel demand has averaged 3.7 million barrels per day over the last
four weeks, down by 9.1 percent from the same period last year. Jet fuel demand
is 0.2 percent higher over the last four weeks compared to the same four-week
period last year.

The tables that follow display the latest U.S. Petroleum Balance Sheet and the
most recent 4 weeks of Weekly Petroleum Status Report data.

[a]

Oil Supply Threads the Forecast Needle
5 comments
by: Hard Assets Investor

February 04, 2010 | about: DBO / OIL

By Brad Zigler

Forecasting changes in weekly oil inventories can be a dicey business. Sometimes the estimates made by the industry-supported American Petroleum Institute and sell-side analysts are widely disparate; sometimes they coincide. And sometimes, like this week, they can be on either side of the numbers posted by the U.S. Energy Department.

Yesterday, the American Petroleum Institute said crude inventories likely rose 4.7 million barrels.

Analysts, however, foresaw more modest builds. Oil Patch observers were all over the board, with median estimates ranging from no change to an increase of 400,000 barrels.

Actual inventories, according to Energy Department figures, were somewhere in the middle of the forecast range—an increase of 2.3 million barrels. With stocks now at 329 million barrels, domestic supplies remain above average for this time of year.

In anticipation of the government supply report, NYMEX March crude oil was modestly higher overnight but flattened out near the day session's opening.

Crude oil ran up a three-day winning streak Tuesday, rising 3.8 percent as fresh buyers poured into NYMEX contracts following Monday's short exodus. Oil prices were bolstered by a decline in the U.S. dollar and reports that OPEC would be unlikely to change oil production quotas at its meeting next month in Vienna.

Analysts did better with their forecast of an 800,000- to 1-million-barrel drawdown in distillate stocks. The government reported an actual 1-million-barrel decrease.

They were on the wrong side of the gasoline numbers, though. The Street's forecast of a 1-million- to 1.3-million-barrel increase in gasoline inventories was skunked by Energy Department figures showing a 1.3-million-barrel decline.

Analysts also predicted refinery usage would remain unchanged at 78.5 percent of capacity, but the Energy Department said utilization actually dropped to 77.7 percent. Gasoline production decreased to an average 8.6 million barrels a day, while daily distillate fuel production, including the refining of diesel and heating oil, declined to 3.5 million barrels.

Refinery Usage Vs. Refining Margins

Refinery Usage Vs. Refining Margins



Government figures showed gasoline demand averaging 8.6 million barrels a day, a 0.5 percent decline from year-ago levels, while daily consumption of distillate fuels, at 3.7 million barrels, is down by 9.1 percent.

Crack spreads narrowed slightly this week as spreads for gasoline-rich 3-2-1 operations fell to $10.84 a barrel—a 14 percent margin. Distillate-heavy 2-1-1 refiners looked at a $10.22 crack, or a 13.2 percent margin.

The premium for lighter, sweeter West Texas Intermediate crude (vs. North Sea Brent) fell from $2.06 a barrel to $1.85 this week.

A three-month NYMEX roll cost an average $1.64 a barrel, up from last week's $1.51. The annualized cost of carry implied by the market's contango is 304 basis points.

Technically, the stochastics RSI indicators have turned positive for March crude, though a trend shift hasn't yet been confirmed by MACD. Bulls have put a retracement level of $77.96 in sight as an interim objective, which fairly well coincides with the present 50-day moving average. Consider that resistance. Support's likely at the 10-day moving average at $75.51.

[Randall]

Hmmmm.....Euro down and Dollar up huh?

Here is a good article from Gregor MacDonald:

7 US States That Are Worse Off Than Greece, Portgal, Ireland, And Spain

The inevitable coming of the sovereign debt panic finally engulfed Europe this week as the derisively (or perhaps affectionately) named PIGS spilled their slop on the continent. But Portugal, Ireland, Greece, and Spain are hardly worthy of so much attention. In truth, they are little more than the currently favored proxies among the leveraged speculator community (cough) for the larger problem of all sovereign debt. Indeed, the credit default swaps on these smaller European satellite states were not alone this week in making large moves higher. UK sovereign risk rose strongly, and so did US sovereign risk. With a downgrade warning from Moody’s to boot.

Notable among three of the PIGS are their relatively small populations, and small contributions to either world or European GDP. While Spain has a population over 45 million, Portugal and Greece have populations roughly equal to a US state, such as Ohio–at around 10 million. And Ireland? The Emerald Isle has a population similar to Kentucky, at around 4 million. While the PIGS are without question a problem for Europe, whatever problems they present for Brussels are easily matched by the looming headache for Washington that’s coming from large, US states such as California, Florida, Illinois, Ohio, and Michigan.

I’ve identified seven large US states by four criteria that are sure to cause trouble for Washington’s political class at least for the next 3 years, through the 2012 elections. These are states with big populations, very high rates of unemployment, and which have already had to borrow big to pay unemployment claims. In addition, as a kind of Gregor.us kicker, I’ve thrown in a fourth criteria to identify those states that are large net importers of energy. Because the step change to higher energy prices played, and continues to play, such a large role in the developed world’s financial crisis it’s instructive to identify those US states that will struggle for years against the rising tide of higher energy costs.

First, let’s consider a large state that didn’t make my list. Texas didn’t make the list because its unemployment rate has not risen high enough to reach my cutoff: a state must register broad, U-6 underemployment above 15%, and currently Texas has only reached 13.7% on that measure. Also, Texas’s total energy production nearly perfectly matches its total energy consumption. Of course, Texas has indeed had to borrow more than billion dollars so far to pay unemployment claims, thus technically bankrupting its unemployment trust fund. That meets my criteria. But, it’s instructive to note Texas’ energy production capacity in this regard, as that produces dollars. And one of the big reasons US states are under so much pressure, like their European counterparts, is that they cannot print currency. Being able to produce oil and gas is the next best thing to printing currency. So, Texas doesn’t make my list.

The seven states to make my list are California, Florida, Illinois, Ohio, Michigan, North Carolina, and New Jersey. Each has a population above 8 million people. Each has had to borrow more than a billion dollars, so far, to pay claims out of their now bankrupt unemployment insurance fund. Also, each state currently registers broad, underemployment above 15% as indicated by the U-6 measure for the States. And finally, each state is a large net importer of either oil, natural gas, electricity, or all three of these energy sources.

Let’s consider the overall predicament for residents of states like California, with its epic housing bust, Ohio and Michigan at the end of the automobile era, or North Carolina and New Jersey in light of the financial sector’s demise. Not only have states such as these permanently lost key sectors that once drove their economies, but, residents in these states are over-exposed to structurally higher energy costs. The prospect for wage growth in the United States is now dim. We are already recording year over year wage decreases in real terms. The culprit? Energy and food costs. My seven states are squeezed hard at both ends: no wage growth at the top, and no relief through cheaper energy costs at the bottom.

US wage growth in real terms has been stagnant for years. And the most recent decade of higher oil prices has been particularly punishing to states over-leveraged to the automobile like California, Florida, and North Carolina where highway and road systems dwarf public transport. While it’s true that states like Ohio and California produce some oil and gas, the size of their populations overwhelm any production with outsized demand for electricity and gasoline. In contrast, and as I mentioned, it will be revealing to see how this depression ultimately plays out in such states as Colorado, New Mexico, Wyoming, Oklahoma, North Dakota, and Louisiana which are all net exporters of energy.

Were it not for peak oil, gasoline prices would have fallen to a dollar during this depression as oil returned to the lows of the late 1990’s–if not even lower. Petrol at 90 cents a gallon would begin to chip away at the painfully decreasing spread between punk wages and energy input costs, currently endured by underemployed Americans. Natural gas and coal prices are also much higher than they were at the lows of the 1990’s. And I need not remind: while energy prices are very 2010, the American workforce has lost so many jobs that our labor force has indeed returned the 1990’s.

21st century energy prices overlaid on a 20th century economy? That’s no fun at all. The mainstream economics profession, perhaps unsurprisingly, still does not pay enough attention to the interweaving of long-term stagnant wage growth, higher energy inputs, and the resulting credit creation that OECD countries took as the solution to resolve that squeeze. Given that one of out of eight Americans takes food stamps, a visit to states like Illinois, Florida, Ohio, and North Carolina would reveal that the difference between 15 dollar oil and 75 dollar oil, and 2 dollar natural gas and 5 dollar natural gas is large.

My seven states of energy debt represent a full 35% of the total US population. As with other US states, they face looming policy clashes between protected state and city workers on one hand, and the growing ranks of the private economy’s underemployed on the other. The recent circus at the LA City Council meeting was a nice foreshadowing that the days of unlimited borrowing by governments–against future growth based on cheap energy–is coming to an end. Washington can print up dollars and fund these states for years, if it so chooses. But just as with the 70 million people in Portugal, Italy, Greece and Spain, the 108 million people in these seven large states are probably facing even higher levels of unemployment as austerity measures finally slam into their cashless coffers, and reduce their ability to borrow.

[bellevue]

Analysts polled by Platts expect a 1.65-million-barrel build in crude supplies for the week ended Feb. 12. They also project an increase of 1.5 million barrels in gasoline stocks and a decline of 1.6 million barrels in distillate supplies.

[bellevue]

NYMEX-Crude little changed on small API stock draw
Wed Feb 17, 2010 5:39pm EST
Related News

* NYMEX-Crude ends slightly up, awaits inventory data
4:06pm EST
* NYMEX-Crude up, but choppy on dollar, economic data
10:27am EST
* NYMEX-Crude ends down on EIA build, China worries
Fri, Feb 12 2010
* NYMEX-Crude stays down on EIA build, China moves
Fri, Feb 12 2010
* NYMEX-Crude down on dollar rise, API stocks data
Wed, Feb 10 2010

Stocks

Nexen Inc.
NXY.TO
$23.11
-0.13-0.56%
1:34pm MST

* API: Small crude draw, distillate stocks higher

* Dollar rallies versus euro on U.S. economic data

NEW YORK, Feb 17 (Reuters) - U.S. crude futures were little
changed on Wednesday after weekly industry inventory data
showed a small drawdown in domestic crude stocks, defying
forecasts that supplies rose last week.

Heating oil futures trimmed gains after the American
Petroleum Institute's data showed that distillates, including
heating oil stocks, gained, dashing forecasts for a drawdown.

Gasoline futures also pared gains as the API reported that
gasoline stocks rose, just below expectations.

The API said that for the week to Feb. 12, crude

[ben2008]

According to the Bloomberg survey, analysts believe that crude oil inventories had a build of 1725K during the week ending Feb 12 (last year crude saw a draw of 138K); expectations range from a draw of 2000K barrels to a build of 4800K (17 out of 18 analysts expect a build); prior 4 week avg is a build of 96K... Analysts believe gasoline inventories had a build of 1500K (last year gas saw a build of 1105K); expectations range from a build of 500K to a build of 2000K (18 out of 18 analysts expect a build); prior 4 week avg is a build of 1738K... Analysts believe distillate fuel inventories had a draw of 1500K (last year distillates saw a draw of 813K); expectations range from a draw of 2250K to a draw of 800K; (18 out of 18 analysts expect a draw); prior 4 week avg is a draw of 1052K.


Summary of Weekly Petroleum Data for the Week Ending February 12, 2010

U.S. crude oil refinery inputs averaged 13.8 million barrels per day during the
week ending February 12, 182 thousand barrels per day above the previous week's
average. Refineries operated at 79.8 percent of their operable capacity last
week. Gasoline production decreased last week, averaging 8.4 million barrels
per day. Distillate fuel production increased last week, averaging 3.4 million
barrels per day.

U.S. crude oil imports averaged 8.5 million barrels per day last week, up 206
thousand barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged 8.3 million barrels per day, 1.3 million
barrels per day below the same four-week period last year. Total motor gasoline
imports (including both finished gasoline and gasoline blending components)
last week averaged 709 thousand barrels per day. Distillate fuel imports
averaged 391 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased by 3.1 million barrels from the previous week. At
334.5 million barrels, U.S. crude oil inventories are above the upper limit of
the average range for this time of year. Total motor gasoline inventories
increased by 1.7 million barrels last week, and are above the upper limit of
the average range. Finished gasoline inventories decreased while blending
components inventories increased last week. Distillate fuel inventories
decreased by 2.9 million barrels, and are above the upper boundary of the
average range for this time of year. Propane/propylene inventories decreased
by 3.0 million barrels last week and are below the lower limit of the average
range. Total commercial petroleum inventories decreased by 2.4 million barrels
last week, and are above the upper limit of the average range for this time of
year.

Total products supplied over the last four-week period has averaged 19.0
million barrels per day, up by 0.2 percent compared to the similar period last
year. Over the last four weeks, motor gasoline demand has averaged 8.6 million
barrels per day, down by 1.3 percent from the same period last year. Distillate
fuel demand has averaged 3.7 million barrels per day over the last four weeks,
down by 7.4 percent from the same period last year. Jet fuel demand is 1.4
percent higher over the last four weeks compared to the same four-week period
last year.

The tables that follow display the latest U.S. Petroleum Balance Sheet and the
most recent 4 weeks of Weekly Petroleum Status Report data.

[vferg]

Total commercial petroleum inventories decreased by 2.4 million barrels last week