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Page added on July 7, 2017

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Fake crude oil news?

Fake crude oil news? thumbnail

Crude oil prices sold off almost 5% on what many people attributed to a story that some unnamed Russian oil company source said that Russia was against a production cut. Today those sources are still unknown, but really the sell-off in oil probably had more to do with the fact that Saudi Arabia cut prices to Asia as the kingdom was losing market share to Iraq and Iran that has been raising output and taking away business from the Saudis.

Reuters News reported that OPEC exports increased last month. OPEC exported 25.92 million barrels per day in June, up 450,000 barrels per day from May and 1.9 million bpd more than a year earlier and reports of rising production from Nigeria and Libya is giving the perception that the OPEC/non-OPEC accord is becoming strained and that might cause the whole production cut deal to fall apart.

Yet, while the market speculates on reports from unnamed Russian sources and conflicting data on OPEC exports, an earlier report showed that OPEC exports fell and it seems that many are looking at data with bearish blinders on. The reality is that we are seeing U.S. oil supply still decline at record pace. The American Petroleum Institute (API) reported that U.S. crude oil supply plunged by 5.8 million barrels last week. That drop comes as the rise in U.S. rig counts paused and we saw a drop in U.S. oil production. Where the trend of falling U.S. oil supply is most evident is in the Nymex delivery point of Cushing, Okla., where supplies fell again by a hefty 1.4 million barrels.

The API also reported a large 5.7 million barrel drop in gasoline supply as gas went up on the rack ahead of what may have been a record-breaking demand weekend for gasoline as prices hung around a 12 year low for the holiday. While the market did see a 400,000 barrel build in distillates, the overall bullish nature of the data does not fit the bearish oil narrative.  That makes today’s Energy Information Administration (EIA) report very big to see if oil can regain the nearly 5% loss it suffered yesterday.

Not only do we have to watch the total inventories but also the U.S. oil production number. We saw a fall last week and many traders want to know if that was a fluke or is it a sign that U.S. oil output has hit a short-term peak. We know we are seeing an uptick in uncompleted wells and the wells that are being completed are seeing less production per well. Those are warning signs that the shale producers are struggling to deal with the ramifications of the recent oil price crash.

The oil market also took note of Volvo’s announcement that they are planning to phase out gas only car production by 2019, and only produce electric or electric hybrid cars. The company also said that it would launch three new fully electric Volvos between 2019 and 2021. They also plan to make two high-performance electrics under the Polestar brand that is expected to challenge Tesla. Still, the move by Volvo may not be as devastating to future gasoline demand as many think as we will see the internal combustion engine satisfy most of the growth for new vehicles in the developing world but is still a glimpse into a future where we will need less gasoline per car but we will still see a lot more cars being built.

 

By Phil Flynn Resource Investor



17 Comments on "Fake crude oil news?"

  1. dave thompson on Fri, 7th Jul 2017 1:46 pm 

    And more market bullshit news later after the break…………

  2. Boat on Fri, 7th Jul 2017 4:05 pm 

    Maybe oil is down because American frackers along with Lybia and Nigeria have negated the 1.8 million in production cuts. A glut is still a glut. The approx 1 mbpd the US has added to world production is just part of the story. Over 5,000 wells have yet to be fracked. You may not track these facts but savvy traders do.

  3. Northwest Resident on Fri, 7th Jul 2017 6:13 pm 

    “You may not track these facts but savvy traders do.”

    ROFL. Those 5000 wells yet to be fracked are waiting on the next magnificent burst of CB/FED “stimulus” — no free and easy “money” to plow into the ground, no more fracking. Savvy traders these days keep there eyes on the CB/FED money spigot, because that is ALL that matters in today’s hyper-financialized global economy.

  4. Makati1 on Fri, 7th Jul 2017 8:41 pm 

    Problem with the PO website?

    It is ALL grade A Bullshit! No one knows what is in the ground, what is coming out of the ground, or when it will end. It all depends on the world financial system not collapsing, which it will. When it does, there will be a whole new world out there and it will not be anything like today. Not even close. And it will be much closer to the 3rd world for everyone, than the 1st world. you can bank on that. LMAO

  5. Dredd on Sat, 8th Jul 2017 1:31 pm 

    It is all crude and flake to me.

  6. Davy on Sat, 8th Jul 2017 3:13 pm 

    “Financial “Collateral Damage” Highlights China’s And Fed’s Impossible Task”
    http://tinyurl.com/y7m9p5m5

    “China Broad Credit Growth Slows to Zero. The side effect is a huge amount of collateral damage.”

    “China’s Dilemma”
    “I do not know what China will ultimately choose, but something has to give one way or another. China’s unpleasant choice is a bubble bust now or a bigger bubble and a bigger bust later. By the way, the Fed faces a similar unpleasant choice, as do central banks in general. Asset bubbles are everywhere.”

  7. Cloggie on Sun, 9th Jul 2017 4:52 am 

    Oil prices plunge nearly 3% as glut persists

    https://www.rt.com/business/395597-oil-fall-two-percent-oversupply/

  8. sidzepp on Sun, 9th Jul 2017 7:55 am 

    So oil continues to drop, SUV and pick-up vehicles sales up. Talk about a bail out for the automotive industry. This should help us get to peak oil a little quicker.

    https://www.forbes.com/sites/jaclyntrop/2017/07/03/u-s-auto-sales-continue-to-fall-slipping-2-percent-for-the-year/#4288199c62dd

  9. onlooker on Sun, 9th Jul 2017 8:23 am 

    I have a wager going that the WTI oil price will go below $40 bbl sometime in 2018, while my betting partner says it will not. What do other posters think ?

  10. rockman on Sun, 9th Jul 2017 8:56 am 

    Onlooker – “I have a wager going that the WTI oil price…What do other posters think?” I think it makes more sense to bet on the spin of a roulette wheel: at least that probability of success is printed on the table. There’s no Ps that can be calculated for a predicted oil price. LOL.

  11. rockman on Sun, 9th Jul 2017 9:15 am 

    We continue to the see the biggest fake oil news from the MSM and countless other writers: there has never been an effective ban on the export of US oil. Despite the fact that the stats from the same govt that passed the same “ban” show that more then 1.2 BILLION BBLS OF US OIL have been exported since the “ban” became law. In fact during President Obama’s watch more US oil was exported in one year then under any other POTUS in history. And that was before he rescinded the “ban”.

    Even today I’ve yet to see a single news report pointing out this Mother of All Fake News. LOL.

    Compounding this lie even worse is the fact that the amount of refinery products made from US oil today greatly exceeds the amount of oil directly exported. But it still represents US oil being sold to foreign buyers.

  12. bobinget on Sun, 9th Jul 2017 10:31 am 

    http://stepfeed.com/saudi-arabia-just-recorded-its-highest-ever-temperature-3409

    Arab News reports that central and eastern parts of the kingdom have witnessed record-breaking temperatures, reaching 53 degrees Celsius for the first time in these areas.

    Al-Zaaq added that the first week of July marked the beginning of the scorching heat of the summer, which is expected to last for 52 days.

    Based on Guinness World Records, the official highest temperature ever recorded on Earth is 56.7 degrees, measured in California in 1913.

    Note: It must be said. Three or four degrees short of a world record temp must make it near impossible to work outside. No wonder SA is cutting oil exports. Domestic needs trump.
    Solar power generation falls dramatically (30%)
    over 65C.

    Oil is SA’s chief air conditioning back-stop.
    for the next 50 days or so 25% of oil produced must now go to keep population alive in 40 plus heat.

    oil bulls, read this;
    http://www.tandfonline.com/doi/abs/10.1080/15567249.2016.1248874?src=recsys&journalCode=uesb20

  13. bobinget on Sun, 9th Jul 2017 10:49 am 

    Rockman, respectfully,
    Much of those pre ban lifted oil exports consisted of refined product, not raw crude.

    Natural gas exports (to Mexico and Eastern Canada). Are in entirely different kettles .

  14. bobinget on Sun, 9th Jul 2017 11:28 am 

    Donald J. Trump ✔ @realDonaldTrump
    Gas prices are the lowest in the U.S. in over ten years! I would like to see them go even lower.
    12:55 PM – 4 Jul 2017
    31,304 31,304 Retweets 160,183 160,183 likes
    Twitter

    Gas prices [have been] lower than today’s prices several times in the past decade. Oh, the pain … There is an old adage: a lie goes halfway around the world before the truth gets out of bed. It is painful trying to chase down and refute deceit — far more hear and absorb the deceit than ever hear the truthful refutation. And, when the deceiver occupies the Oval Office and has the megaphone of a (bot-heavy) massive Twitter account … ”

  15. bobinget on Sun, 9th Jul 2017 11:54 am 

    If you’ve been recently banished, it will be 95 F in Siberia on Tuesday.

    https://weather.com/weather/tenday/l/RSXX0122:1:RS

    Are weather predictions fake? If a few Siberian pipelines collapse on account of methane explosions and/or melting permafrost, who do ya call?

  16. rockman on Sun, 9th Jul 2017 12:55 pm 

    Bob – “Rockman, respectfully, Much of those pre ban lifted oil exports consisted of refined product, not raw crude.”

    Respectfully you are completely wrong. LOL. I guess you’ve never went to the EIA link I’ve posted more then a dozen times. Here it is again with the link showing that the surge in US refinery products exports is a recent phenomenon. This graph shows CRUDE OIL EXPORTS as well as refinery exports:

    https://www.eia.gov/dnav/pet/pet_move_exp_dc_NUS-Z00_mbblpd_m.htm

    And to make it easier then adding up the individual products above here they are combined highlighting the recent surge I mentioned. Compare this curve to the crude oil export curve:

    https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mtpexus2&f=a

    My friend I’m sad to point out that you represent the vast majority of the general public that has been swallowing the Kool-ade put out by the MSM about the fictitious oil export “ban”. But feel free to post any DOCUMENTED data that refutes that offered by the US govt.

  17. rockman on Sun, 9th Jul 2017 1:05 pm 

    Bob – And since you point out NG exports to Canada I’ll point out that the majority of US CRUDE OIL EXPORTS have gone to Canada. This doesn’t even require an exception to the “ban” since the “law” specifically exempts Canada. About 350,000 bbls per day of light US oil has been exported for years to Alberta to blend with oil sands production to make dilbit. Most of the rest (mostly Eagle Ford Shale production) has been exported to eastern Canadian refineries to blend with their heavy oil imports.

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