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pup55
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Post subject: Re: Weekly US Petroleum and NG Supply Reports 2009  Posted: Wed Oct 14, 2009 6:28 pm |
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Joined: Wed May 26, 2004 12:00 am
Posts: 4447
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Quote: U.S. stockpiles of crude oil fell 172,000 barrels to 339.2 million last week, according to a report from the American Petroleum Institute. Gasoline inventories declined 2.66 million barrels, the report showed.
The Energy Department will probably report that crude-oil inventories rose by 1 million barrels in the week ended Oct. 9, according to the median of estimates from 13 analysts polled by Bloomberg News. Gasoline stockpiles probably climbed 1.13 million barrels, the survey showed. Quote: http://www.bloomberg.com/apps/news?pid=20601072&sid=a4.1BIUpUF.k Quote: Analysts surveyed by Dow Jones Newswires forecast that for the week ended Oct. 9, crude-oil inventories will have risen 600,000 barrels, gasoline by 700,000 barrels, while distillate stocks - which include diesel and heating oil - will have dropped by 100,000 barrels. http://online.wsj.com/article/BT-CO-20091014-714358.html?mod=rss_Commodities
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pup55
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Post subject: Re: Weekly US Petroleum and NG Supply Reports 2009 Posted: Thu Oct 15, 2009 8:36 am |
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Joined: Wed May 26, 2004 12:00 am
Posts: 4447
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Quote: Unleaded 9-Oct
Beginning Inv 214.4
Imports 4.83 0.69
Production 59.5 8.5
Available 278.73
Ending Inv 209.20
Balance 69.53
Balance/day 9.93
Prod Supplied 9.11
Actual Change -5.2
Deviation from Forecast -3.8
Distillates 9-Oct
Beginning Inv 171.8
Imports 1.148 0.164
Production 27.3 3.9
Available 200.248
Ending Inv 170.7
Balance 29.548
Balance/day 4.22
Prod Supplied 3.449
Actual Change -1.1
Deviation from Forecast -0.5
Crude Oil 9-Oct
Beginning Inv 337.4
Production 37.1 5.3
Imports 60.9 8.7
SPR+/Supply- -0.126 -0.018
Total Available 435.274
Provided to Ref 98.7 14.10 80.9
Ending Inventory 337.8 336.574
Actual Change 0.4
Deviation from Forecast 0.6996
pup55 Experts Actual
Crude Oil -0.2996 1 0.4
Unleaded -1.37 1.13 -5.2
Distillates -0.6 -0.1 -1.1 The "click" you heard about a week ago was 4% of the nation's refinery capacity being shut off..... It will be interesting to see if it ever comes back Quote: Summary of Weekly Petroleum Data for the Week Ending October 9, 2009
U.S. crude oil refinery inputs averaged 14.1 million barrels per day during the
week ending October 9, 510 thousand barrels per day under the previous week's
average. Refineries operated at 80.9 percent of their operable capacity last
week. Gasoline production decreased last week, averaging 8.5 million barrels
per day. Distillate fuel production decreased last week,averaging 3.9 million
barrels per day.
U.S. crude oil imports averaged 8.7 million barrels per day last week, down 367
thousand barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged 9.3 million barrels per day, 374 thousand
barrels per day above the same four-week period last year. Total motor gasoline
imports (including both finished gasoline and gasoline blending components)
last week averaged 690 thousand barrels per day. Distillate fuel imports
averaged 164 thousand barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased by 0.4 million barrels from the previous week. At
337.8 million barrels, U.S. crude oil inventories are above the upper boundary
of the average range for this time of year. Total motor gasoline inventories
decreased by 5.2 million barrels last week, and are just above the upper limit
of the average range. Finished gasoline inventories decreased but blending
components remained unchanged last week. Distillate fuel inventories decreased
by 1.1 million barrels, and are above the upper boundary of the average range
for this time of year. Propane/propylene inventories increased by 0.1 million
barrels last week and are above the upper limit of the average range. Total
commercial petroleum inventories decreased by 5.8 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, up by 2.1 percent compared to the similar period last
year. Over the last four weeks, motor gasoline demand has averaged about 9.1
million barrels per day, up by 5.3 percent from the same period last year.
Distillate fuel demand has averaged 3.4 million barrels per day over the last
four weeks, down by 10.8 percent from the same period last year. Jet fuel
demand is 3.5 percent lower 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. The drop in refinery production was pretty sudden. In past years, there has been some efforts to taper off.... It appears that our earlier expectation that the system will drop to under 80% utilization will happen. Imports of only 8.5, coincident with the drop in refinery utilization, kept me from looking pretty silly on the forecast.... If memmel's oil bank theory is right, the amount of oil we need is readily available out in the gulf, so the argument can be made that imports will become some function and/or dependent on production. The refiner guy says "we don't need the oil", calls the captain... he gets on the helicopter headed for Padre.... the system works. I suppose there will still be some fluctuation and there is the continued impact of the futures situation we have to deal with so I will not go through a lot of mathematical modeling on this for awhile yet.... Unleaded demand is still pretty strong, and this week's giant plummetting in inventory is an artifact of unusually low imports, the noted low refinery production, in the face of what is still respectable demand for unleaded. At 209 mbbl, we are only three weeks from the MOL at the current rate of drainage, although no one seems to be particularly panicked over the fact.... It will be interesting to see what happens.....This is one of those weeks we really look forward to, when the world changes, and we are left to wonder whether the change will be permanent or really, really temporary.
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memmel
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Post subject: Re: Weekly US Petroleum and NG Supply Reports 2009 Posted: Thu Oct 15, 2009 11:11 am |
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Joined: Wed Oct 31, 2007 12:00 am
Posts: 209
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What I don't quite understand is as refinery capacity is shut down your going to have to empty the oil tanks co-located at the refineries. Now of course depending on a bazillion factors this storage can be used to hedge esp if the oil can be piped back out into the network.
So it remains to be seen how all of that plays out certainly some of it at least will be drained down or has been drained before the refinery was mothballed.
I have to think a inventory pull down has to happen to reflect this simple physical loss of storage.
Thus I find the fact we have yet to really see inventories follow falling capacity perplexing.
I'm not surprised of course given my feeling on the inventory numbers but its so basic that if you start shutting down refineries all over the place why keep the tanks full ?
So there should be some fairly significant pull downs in the works at some point.
Maybe they topped the tanks off assuming all the refineries can also work as oil storage depo's ?
One would think they would then now start to pull these down. This fits with the imports to some extent as the refiners my be bolstering their crude supply from storage.
However given the oil bank has responded in kind i.e slowed imports dramatically and the price of crude went up significantly one has to figure that refinery storage will be pulled down.
No matter how I spin this one I just can't see a reasonably quick pull down of oil storage to match the new reduced refining capacity.
Regardless at some point it seems the tanks at operating refineries will have ample room and once this happens I can't see refineries making use of storage at closed refineries to form their own mini-oil bank it does them no good its just and expense.
Next of course as far as the oil bank goes no matter how you slice and dice it the picture is grim if the current imports are a result of the oil bank pulling back then real imports from producers are way to low and we draw down fast as Pup noted.
If the oil bank decides to open the taps again later then they are draining their storage and will eventually either give up or be forced to front run their customers for oil. Assuming they are doing 1mbd and real imports are 8mbd when they try to refill that pulls real imports down to 7mbd !
That why I keep saying that in the long run all the oil bank does is buffer crude supplies to ensure availability at a price. Like any simple hoarding program it overall does not change the price simply time shifts it depending on how the hoarder moves his product. In the end he has no choice but to front run his customer and leverage his storage capability. You trade a period of relatively low prices and ample supply for a period of much higher prices later.
But now if the hoarder decides to liquidate you run smack into shortages as the real supply chain has a larger buffer removed from the system. Damned if you do and damed if you don't. And of course the entire time storage levels where artifically high even if lower than claimed so in effect you have robbed the real oil producers of a lot of money.
I seriously doubt regardless of what they say that they will rapidly open the taps.
If I was a real oil producer I'd not even bother until I had made back all my money if oil had stayed at 140 a barrel over the last two years. Only then would I even consider expanding supply assuming I can.
Obviously once the oil bank is either forced to front run its customers or dissipate the oil producers are then in total control of the situation and minor cutbacks in flow can have a dramatic impact on prices.
KSA holding as little as 500kbd off the market is sufficient to practically double oil prices certainly 1mbd is more than enough to ensure robust pricing. Why on earth would they flood the market with oil when they win big simply practicing the tiniest amount of constraint assuming they have the production to constrain ?
And last but not least its not trivial to open the taps so their response time is orders of magnitude less than the oil banks they don't have VLCC's loaded sitting off shore waiting to unload at least not yet I'm sure they are reconsidering how they deliver oil. But of course if they decide to play that game your dealing initially with two competing hoarders and its obvious who suffers.
And of course if the glut was not as large and more of this was actually coming from oil producers it does not matter all that much as obviously they simply now have the upper hand in controlling prices. Again it really does not matter how you slice the problem up the result is the same we have finally started to reach the point where OPEC is in full control of the market and now we simply wait to see what oil price will cause them to open up the taps.
If they can.
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pup55
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Post subject: Re: Weekly US Petroleum and NG Supply Reports 2009 Posted: Thu Oct 15, 2009 3:39 pm |
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Joined: Wed May 26, 2004 12:00 am
Posts: 4447
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Quote: What I don't quite understand is as refinery capacity is shut down your going to have to empty the oil tanks co-located at the refineries. Now of course depending on a bazillion factors this storage can be used to hedge esp if the oil can be piped back out into the network. In the situation I used to be around, the purchasing people in the plants had maybe a month of storage at a given moment, plus a pipeline or supply chain about six weeks out for production planning purposes. They could use their on-side storage as sort of a buffer to even out the deliveries if they had some delay or weather issue. The ideal size of the inventory at a given moment was calculated by an optimization model that considered the price of the oil, the needs of the production facility, the storage cost (which was a sunk cost because we owned the tank) and how easy it was to get feedstock if you really needed it, that is, the cost of a rush shipment if you had to pay Uncle Guido for some crude oil. When the sales forecasts and production schedules were announced there was always a lag time between the decision to change production and the rate at which the buyers could adjust the ongoing supply chain because a lot of it was under contract already, and we had to take it..... so sometimes we ended up topping off the tanks..... and similarly, if the price was high, the buyers would hold off a few days to try to get the price and allow the storage to draw down a bit... But if we are in a world where there is no longer a six week lead time, and you can make a call and take delivery in a day or two, or not, maybe we could be entering a period where there is a lot of oil on the water, people have oil in the tanks, and they will just sort of play it by ear rather than go too far out in the market, particularly in a contango world where next month's oil is more expensive than what you have in the tank.... Of course then you run the risk of running out of feedstock, but maybe that is calculated into the equation, since there is excess capacity in the industry right now....maybe a little downtime does not bother them.
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memmel
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Post subject: Re: Weekly US Petroleum and NG Supply Reports 2009 Posted: Thu Oct 15, 2009 10:02 pm |
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Joined: Wed Oct 31, 2007 12:00 am
Posts: 209
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pup55 wrote:
Of course then you run the risk of running out of feedstock, but maybe that is calculated into the equation, since there is excess capacity in the industry right now....maybe a little downtime does not bother them.
Thanks Pup in short it depends. However that last little part was interesting. We may well have not seen the bottom in refinery utilization. That makes the current price runnup all the more interesting since given this part of what you said I'd argue that refiners are going to run down storage now and simply go idle a bit until product levels have been drawn down. This makes the current increase in oil prices all the more interesting since on the ground actual demand should be falling steadily even as stocks of all kinds run down. Now if you going to play that game and run your stocks down and idle your refinery a bit and prices are increasing what you might want to do is hedge forward in the futures market to lock in some relatively low prices right now. Maybe not fully hedged but guessing you will probably be gearing back up around late November or December might as well go ahead and hedge. No matter how you slice and dice it if refineries are planning on draining down oil storage and products then the oil prices will naturally be higher in December than now. This suggests that outside the US the market for oil is strong enough to absorb extra barrels not shipped to the US as refineries slow down. A little bit of smart international knowledge or a good view of the global spot market is required to make the right decision here. But it really seems to me that the addition of going ahead and hedging up in the futures market makes sense. In fact I'd not be surprised in the least if the refiners themselves did not show a bit of market smarts and boost gasoline production driving down oil prices and they hedged a few weeks back. Regardless it seems that we should then see falling inventory across the board even as refinery utilization drops over the next several weeks and thus the refiners who played it smart and hedged correctly will show some decent profits finally come December esp if oil keeps going berserk. For all practical purposes its effectively as much of a refiners strike as is possible given their contract arrangements. Now the oil bank is faced with a interesting situation they probably can reload on oil as its available as refineries cut back but they are paying a pretty penny if they got caught in a trap. Some really big and I think desperate bets being made by refiners. Of course if they are very confident that oil supplies will be tight come late Nov/Dec then its not all that desperate just the first time they had a chance to execute this sort of maneuver. Seems to me like some real battles may be taking place behind the scenes as refiners fight for survival. Lets see over the next several weeks as the winning combo for refiners seems to imply a steady draw down of all storage with falling refinery utilization.
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arefin
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Post subject: Re: Weekly US Petroleum and NG Supply Reports 2009 Posted: Sun Oct 18, 2009 7:28 am |
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Joined: Sun Oct 18, 2009 7:14 am
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Some More updates Code: Table 1. U.S. Petroleum Balance Sheet, 4 Weeks Ending 10/09/2009
Cumulative
Four Week Averages Daily Averages
Petroleum Supply Ending % 281 Days %
(Thousand Barrels per Day) 10/09/09 10/09/08 Change 2009 2008 Chg
------------------------------------------------------------------------------------
Crude Oil Supply
Domestic Production (1) 5,353 4,141 29.3 5,244 4,954 5.9
Net Imports (Incl SPR) (2) 9,258 8,875 4.3 9,244 9,731 -5.0
Gross Imports (Excl SPR) 9,289 8,915 4.2 9,229 9,756 -5.4
SPR Imports 0 0 -- 52 0 --
Exports 31 40 -22.5 36 25 44.0
SPR Stocks W/D or Added -18 119 -- -83 -19 --
Other Stocks W/D or Added -179 -115 -- -33 -71 --
Product Supplied and Losses 0 0 -- 0 0 --
Unaccounted-for Crude Oil (3) 93 251 -- 70 98 --
Crude Oil Input to Refineries 14,507 13,271 9.3 14,443 14,693 -1.7
Other Supply
Natural Gas Liquids Prod. (4) 2,129 1,860 14.5 2,002 2,112 -5.2
Other Liquids New Supply 527 511 3.1 637 467 36.4
Crude Oil Product Supplied 0 0 0.0 0 0 0.0
Processing Gain 985 908 8.5 975 993 -1.8
Net Product Imports (5) 816 1,738 -53.0 868 1,357 -36.0
Gross Product Imports (5) 2,681 3,115 -13.9 2,783 3,148 -11.6
Product Exports (5) 1,865 1,378 35.3 1,915 1,791 6.9
Prod Stocks W/D or Added (6)(7) -200 83 -- -200 -54 --
Total Prod Supplied for Domestic Use 18,764 18,370 2.1 18,724 19,568 -4.3
Products Supplied
Finished Motor Gasoline (4) 9,110 8,648 5.3 9,030 9,002 0.3
Kerosene-Type Jet Fuel 1,410 1,461 -3.5 1,414 1,575 -10.2
Distillate Fuel Oil 3,449 3,866 -10.8 3,600 3,952 -8.9
Residual Fuel Oil 466 542 -14.0 542 621 -12.7
Propane/Propylene 1,040 928 12.1 1,062 1,136 -6.5
Other Oils (8) 3,288 2,926 12.4 3,075 3,283 -6.3
Total Products Supplied 18,764 18,370 2.1 18,724 19,568 -4.3
Total Net Imports 10,073 10,613 -5.1 10,112 11,088 -8.8
------------------------------------------------------------------------------------
Petroleum Stocks % Chg fr
(Million Barrels) 10/09/09 10/02/09 10/09/08 Prev Week Yr Ago
------------------------------------------------------------------------------------
Crude Oil (Excluding SPR) (9) 337.8 337.4 306.2 0.1 10.3
Total Motor Gasoline 209.2 214.4 191.3 -2.4 9.4
Reformulated 1.5 1.8 1.7 -16.7 -11.8
Conventional 80.2 85.1 91.8 -5.8 -12.6
Blending Components 127.5 127.5 97.9 0.0 30.2
Kerosene-Type Jet Fuel 45.3 45.7 37.9 -0.9 19.5
Distillate Fuel Oil (7) 170.7 171.8 127.7 -0.6 33.7
15 ppm sulfur and Under 99.5 100.2 69.2 -0.7 43.8
> 15 ppm to 500 ppm sulfur 19.7 19.9 19.4 -1.0 1.5
> 500 ppm sulfur 51.4 51.6 39.1 -0.4 31.5
Residual Fuel Oil 35.1 35.3 39.0 -0.6 -10.0
Propane/Propylene 73.0 72.9 59.1 0.1 23.5
Unfinished Oils 82.4 81.6 91.6 1.0 -10.0
Other Oils (10) 150.0 150.1 150.9 -0.1 -0.6
Total Stocks (Excl SPR) (7) 1,103.4 1,109.2 1,003.9 -0.5 9.9
Crude Oil in SPR 725.1 725.1 702.3 0.0 3.2
Total Stocks (Incl SPR) (7) 1,828.4 1,834.3 1,706.1 -0.3 7.2
1 Includes lease condensate.
2 Net Imports = Gross Imports (line 3) + Strategic Petroleum Reserve (SPR)
Imports (line 4) - Exports (line 5).
3 Unaccounted-for Crude Oil is a balancing item. See Glossary for further
explanation.
4 Includes adjustments for fuel ethanol and motor gasoline blending components.
5 Includes finished petroleum products, unfinished oils, gasoline blending
components, and natural gas plant liquids.
6 Includes an estimate of minor product stock change based on monthly data.
7 Distillate fuel oil stocks located in the "Northeast Heating Oil Reserve" are
not included. For details see Appendix B.
8 Includes crude oil product supplied, natural gas liquids, liquefied
refinery gases (LRGs), other liquids, and all finished petroleum products
except motor gasoline, kerosene-type jet fuel, distillate, residual fuel oils,
and propane/propylene.
9 Includes domestic and Customs-cleared foreign crude oil in transit to
refineries.
10 Included are stocks of all other oils such as aviation gasoline, kerosene,
natural gas liquids and LRGs (except propane/propylene), other
hydrocarbons and oxygenates, aviation gasoline blending components, naphtha and
other oils for petrochemical feedstock use, special naphthas, lube oils, waxes,
coke, asphalt, naphtha-type jet fuel, road oil, and miscellaneous oils.
Notes: Some data are estimated. See Sources for clarification of estimated data.
Due to independent rounding, individual product detail may not add to total.
Percentages are calculated using rounded numbers.
Sources: (the complete url below appears on two lines)
http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_petroleum_
status_report/current/pdf/sources.pdf
------------------ Band Merchandise
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pup55
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Post subject: Re: Weekly US Petroleum and NG Supply Reports 2009 Posted: Mon Oct 19, 2009 6:11 am |
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Joined: Wed May 26, 2004 12:00 am
Posts: 4447
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Quote: Prediction
Unleaded Prediction 16-Oct
Beginning Inv mbbl 209.2
Imports Wk/Day 5.95 0.85
Production Wk/Day 61.23415585 8.7
Available 276.3841559
Balance Wk/Day 68.7 9.82
Ending Inv Mbbl 207.64
Prod Supplied 9.1
Predicted Change -1.6
Distillates Prediction 16-Oct
Beginning Inv mbbl 170.7
Imports Wk/Day 1.225 0.175
Production Wk/Day 26.66648723 3.8
Available 198.5914872
Balance Wk/Day 29.4 4.2
Ending Inv Mbbl 169.2
Prod Supplied 3.4
Predicted Change -1.5
Crude Oil Prediction 16-Oct
Beginning Inventory 337.8
Domestic Prod 37.1 5.3
Imports 59.5 8.5
SPR+/Supply- -0.245 -0.035
Total Available 434.155
Provided to Refineries 98.7647675 14.11
Ending Inventory 335.3902325
Predicted Change -2.4
Refinery Utilization 79.750
Code: Crude Oil 78.29
HO 2.0260
RBOB 1.969
Gap 0.0570
Ref Margin 5.7726 $/bbl
Ref Margin 0.1374 Cents/Gal Happy Monday. You are the plant manager at one of those big refineries, and you are looking out the window at the sunrise from your office with your feet on the desk, this Monday morning. This actually happened last monday, from the point of view of this calculation, but it does not matter, because the world did not really change too much in the last week.... You have just run the above calculation, and you know that thanks to last week's price rally, which took crude oil up over 78, even if you are an employee of one of the big, efficient refiners like BP or XOM you are not profitable at these pricing levels for finished products. On the other hand, you know that demand for unleaded is up year-on-year and on a par with the pre-Recession 2007 levels, and there was a nice surprise fall snowstorm over the northeast US yesterday, in which a team dressed up like the Oilers was humiliated up around Boston. Do you run the unit more, or less than you did last week, when the system ran just a bit more than 80% utilization? Well, your gross variable margin is not quite "zero" yet, and there is the hope that there will be a hell of a harsh winter.... but on the other hand, there are plenty of distillates around, and you do not want to run more production just to put it into inventory which costs you something. So maybe if you were down last week, you will let it stay down this week. What you do, though is turn the knob over to "unleaded" a bit more, because since the inventory went down so much last week, you ought to make some effort to keep it constant if you can. Next, you are an owner of a tankerful of crude oil, and you are sitting in your office, with your feet on your desk, looking out the window. Maybe your office is in someplace like Saudi, or Dubai, or London, or Amsterdam, or Houston. It is sitting out there in the Gulf of Mexico, bobbing up and down with the waves, like it does, and your pilot is sitting in some establishment in Galveston waiting for a call from you to go to unload it. Do you unload this week, and put a little money in your pocket in anticipation of the price going down? Or, do you wait, and unload next week, hoping that the price will be up? Keep in mind that every dollar of appreciation of the crude oil price brings you in 2 million clams, and with tanker rates being stupidly low like they are, it is only costing you $29K per day.....as of this morning....to let that pilot sit in Galveston and drink. You also know that your customer, the US refiner, even if he is a big guy, did not make any money last week, and he is not making any this week. Well, the trend is your friend. What we do know, is, just like in the above case, the decision we are interested in actually happened last monday....and we know what eventually happened to the crude oil price last week..... I would be willing to bet that at least one owner of crude oil reached for that phone, and decided not to pick it up, choosing to let his captain hang out down in Galveston one more week. 2 million barrels/7 days, at least .2 per day lower imports than we saw last week. You are a soccer mom, if such a thing still exists. Do you drive as much as you did last week? Yes you do. None of this affects you (but it will pretty soon, won't it?) So, these are my theories of the week. Unleaded, distillates and crude oil all down this week. We will see what happens.
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memmel
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Post subject: Re: Weekly US Petroleum and NG Supply Reports 2009 Posted: Mon Oct 19, 2009 3:07 pm |
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Joined: Wed Oct 31, 2007 12:00 am
Posts: 209
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Pup55 your stories are getting much better on a weekly basis. However at some point your poor pilot is going to need a liver transplant the way things are going  Maybe he needs to do some sport fishing or something Personally I don't have a clue whats going to happen next it really all depends on the refiners they have been losing money long enough that they are going to have to do something and nothing is going to help them until product inventories drain down. Of course if you have deep pockets i.e your a integrated refiner then maybe you crank up production as your non integrated foes get wiped out. We could be entering a period where the integrated refiners are flooding the market to wipe out the independents. Two opposing strategies which may result in a bit of a stand off. If true its impossible to guess the overall total. Regardless do or die time is rapidly approaching for several refiners. Whatever the game plans are they are in my opinion going to be forced to act over the next few quarters or even months. One part you left out is regardless of what they do they need to permanently idle enough capacity to get production nearer the 90% range. Its a safe bet that no matter what happens refining margins will be razor thin for the foreseeable future. Now I don't know how nimble the EIA is at adjusting capacity downward I suspect they don't move fast and in many cases given the way our refineries work we probably will see partial shutdowns of some parts of a refinery depending on how its configured not sure how that is included. Maybe some refiners say screw it and turn and export finished products in a big way if the loss is lower then waiting to sell it at home. Maybe even for a profit. To many possibilities but I'm keen to see how this plays out and no matter what product inventories have to come down and I think the great refinery war has just begun.
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pup55
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Post subject: Re: Weekly US Petroleum and NG Supply Reports 2009 Posted: Mon Oct 19, 2009 4:31 pm |
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Joined: Wed May 26, 2004 12:00 am
Posts: 4447
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Quote: One part you left out is regardless of what they do they need to permanently idle enough capacity to get production nearer the 90% range. Yes, you are quite right. Your maintenance foreman has been in the plant for a few hours already, his feet are not up on the desk, and in fact, he does not have a window. His dingy office is in the bowels of the plant, there is some greasy piece of equipment wrapped in oily shop rags on his desk....some paperwork with fingerprints on it is in the "out" box. In the old days, there was a picture of a partially clothed female hanging on his wall, but nowadays, since we are politically correct and he may have a couple of female maintenance workers working for him, those are gone, replaced by a football schedule of the local university. He is the very same guy you asked to work countless hours of overtime two years ago to rush through the unit turnaround so that you could start it back up early. When Katrina or Rita or Ivan or Dean hit, he is the guy that showed up to put the plant back together before fixing up his own house. He is the guy that endangers his life daily, since he is around high temperatures and pressures, and can put it all back together faster than should be possible, for cheaper than he should be capable of doing it. In a few days, or a few weeks, you are going to ask him to get out his cutting torch and/or call the mechanical contractors, and start taking apart your least efficient unit, and selling the metal off for scrap because he did too good of a job. Fact is, it is the equivalent of having him cut up a member of his family, worse in fact because he probably spends more time with the equipment, especially the least efficient one, which he just now finally has running just right. What do you think he will say? He always has some sharp objects and blunt instruments with him. You might want to take him out to lunch when you tell him.
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memmel
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Post subject: Re: Weekly US Petroleum and NG Supply Reports 2009 Posted: Tue Oct 20, 2009 11:26 pm |
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Joined: Wed Oct 31, 2007 12:00 am
Posts: 209
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Despite the runnup in prices VLCC rates seem to be going nowhere. [ur]/http://www.mb.com.ph/articles/224815/supertanker-glut-rises-significant-availability[/url] Quote: There are 20 percent more vessels for hire than cargoes for delivery over the next 30 days, according to the median in a Bloomberg News survey of five people drawn from shipbrokers, shipowners and derivatives brokers. That’s up from the estimated 15 percent surplus on Oct. 5.
And of course we know the state of refining Given the price situation one of two things are happening either the global crude supply is falling rapidly or this price run up is almost pure speculation. Or of course OPEC is increasingly successful at reducing shipments. However unless they eventually increase production once their magical price point is reached we may never know the truth. So lets not consider this one until some point in the future when it seems reasonably for them to finally start increasing production. Thus for the time being it seems crude supplies are falling and the price runnup has a fundamental reason even if its a artificial constraint. Notice how availability went up by five percent over a few weeks. And this was In Oct 15 right around our low point in price I'd have to look to check the timing. What this might mean is that a significant amount of oil held in floating storage was actually offloaded in a mixed play with the futures market to drive futures down. This seems sensible since the most powerful move that can be made with a quick off loading of seaborn storage is to push prices down. Withholding oil from the market to push prices up is a bit less effective. Of course we will probably never know the real state of offshore storage but it does seem like it was unloaded and their simply is no oil to refill the tankers even for a regular run much less for further storage plays. Given this one has to think that if the oil bank still has oil it may decide to hold for a few rounds of play before making its next move. Indeed if it really did offload a lot of oil in and attempt to push prices downwards it now faced with a steep premium to reload so regardless the next round of the game will take place at a higher price point. We may not see 70 dollar oil much lower for a long time if ever from this point on. Short term I expect profit taking to set in soon and have called this rally ended with a floor price of 75 maybe floundering around there for a few weeks even then up to 85 and maybe even beyond depends on how things play out. I'd be very surprised for this rally to carry on much higher however it might finally not just dive right down to its floor price. It would be nice to see some a bit more backbone coming of these highs instead of hurtling downward. In any case its a matter of sitting back and simply watching how oil goes to its new low what it is and how it comes off. Not a lot of info left in the current rally unless by some freak move it turns into another rally on up past 85 I highly doubt it. So I'm back floor watching. And give the above a bit dated VLCC info and the recent price rally what ever is happening abundant supplies of crude don't seem to be part of the equation.
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pup55
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Post subject: Re: Weekly US Petroleum and NG Supply Reports 2009 Posted: Wed Oct 21, 2009 5:13 am |
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Joined: Wed May 26, 2004 12:00 am
Posts: 4447
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Quote: Gasoline inventories fell 1.5 million barrels in the week ended Oct. 16 from 209.2 million the week before, according to the median of seven estimates by analysts surveyed by Bloomberg News before the Energy Department’s report this week.
Total fuel consumption for the week ended Oct. 9 rose to 18.9 million barrels a day from 18.7 million.
Refineries probably operated at 81.9 percent of capacity last week, up 1 percentage point from the previous week, according to the median of survey responses.
“Everybody’s watching for signs of rising production rates and declines in gasoline inventories,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “Until we get our inventory figures for this week, we’re kind of stuck following the equities and the dollar.”
Inventories of crude oil probably rose 1.5 million barrels last week from 337.8 million, the survey showed. http://www.bloomberg.com/apps/news?pid=20601087&sid=avWh2ZUgxwGsQuote: The American Petroleum Institute said in its weekly
inventory report that domestic crude stockpiles rose 3.8
million barrels last week, far more than the forecast for 1.8
million barrel increase in a Reuters poll of analysts. [API/S]
For details the Reuters poll, click on [EIA/S].
Distillate stocks Fell 998,000 barrels and gasoline stocks
dropped 558,000 barrels, the API said.
Distillate stocks were forecast down 1.3 million barrels
and gasoline stocks down 1.0 million barrels in the Reuters
poll. [EIA/S] Quote: Jeesh. Maybe the guy who owns all of that oil did pick up the phone last week after all.... and the price kept going up anyway. I bet he is sad. He'd be four or five million dollars richer if he had waited. I guess we should wait for the actual report to come out to understand this a bit more.
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pup55
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Post subject: Re: Weekly US Petroleum and NG Supply Reports 2009 Posted: Wed Oct 21, 2009 7:52 am |
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Joined: Wed May 26, 2004 12:00 am
Posts: 4447
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Quote: Unleaded 16-Oct
Beginning Inv 209.2
Imports 4.543 0.649
Production 59.5 8.5
Available 273.243
Ending Inv 206.90
Balance 66.343
Balance/day 9.48
Prod Supplied 9.15
Actual Change -2.3
Deviation from Forecast -0.7
Distillates 16-Oct
Beginning Inv 170.7
Imports 0.84 0.12
Production 27.3 3.9
Available 198.84
Ending Inv 169.9
Balance 28.94
Balance/day 4.13
Prod Supplied 3.495
Actual Change -0.8
Deviation from Forecast 0.7
Crude Oil 16-Oct
Beginning Inv 337.8
Production 37.625 5.375
Imports 60.9 8.7
SPR+/Supply- 0 0
Total Available 436.325
Provided to Ref 98.7 14.10 81.1
Ending Inventory 339.1 337.625
Actual Change 1.3
Deviation from Forecast 3.7097675
pup55 Experts Actual
Crude Oil -2.4097675 1.5 1.3
Unleaded -1.56 -1.50 -2.3
Distillates -1.5 -1.3 -0.8
Quote: Summary of Weekly Petroleum Data for the Week Ending October 16, 2009
U.S. crude oil refinery inputs averaged 14.1 million barrels per day during the
week ending October 16, 27 thousand barrels per day under the previous week's
average. Refineries operated at 81.1 percent of their operable capacity last
week. Gasoline production was virtually unchanged last week, averaging 8.5
million barrels per day. Distillate fuel production increased slightly last
week, averaging 3.9 million barrels per day.
U.S. crude oil imports averaged 8.7 million barrels per day last week, down 32
thousand barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged 9.0 million barrels per day, 310 thousand
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 649 thousand barrels per day. Distillate fuel imports
averaged 120 thousand barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased by 1.3 million barrels from the previous week. At
339.1 million barrels, U.S. crude oil inventories are above the upper boundary
of the average range for this time of year. Total motor gasoline inventories
decreased by 2.3 million barrels last week, and are near the upper limit of the
average range. Finished gasoline inventories decreased while blending
components increased last week. Distillate fuel inventories decreased by 0.8
million barrels, and are above the upper boundary of the average range for this
time of year. Propane/propylene inventories decreased by 1.4 million barrels
last week and are at the upper limit of the average range. Total commercial
petroleum inventories decreased by 4.2 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 0.1 percent compared to the similar period
last year. Over the last four weeks, motor gasoline demand has averaged about
9.2 million barrels per day, up by 4.2 percent from the same period last year.
Distillate fuel demand has averaged 3.5 million barrels per day over the last
four weeks, down by 12.1 percent from the same period last year. Jet fuel
demand is 3.2 percent lower over the last four weeks compared to the same
four-week period last year.
Well, if you get out your two dollar calculator, and take the beginning crude oil inventory this week, which was 337.8 mbbl, and add to it the domestic production, which was 5.375 mbpd or 37.625 million barrels per week, and also add to it the imports of 8.7 mbpd (or 60.9 mb for the week) and subtract out the 14.1 mbpd/98.7 million barrels per week input into the refineries, you get a total of 337.63 million barrels, which means that over 2.5 million barrels of oil appeared out of nowhere in inventory this week, which for those of us who like nice, predictable numbers, makes us sad. We have been tracking this little gap between actual and calculated inventory for awhile, and this is as high as it has been in a long time. In unleaded, I was off by virtue of overestimating production.... turns out the refiners did not turn the knob over to Unleaded last week....I also overestimated demand a little bit but this is within the normal fluctuation of my little statistical demand algorithm and I am not too worried about it. I believe I made up for it in distillates, just about right on the money on demand and production, off in the second decimal place in imports. Note that the unleaded and distillate imports are both waaaay off.... these are net imports, of course, a lot of this is due to exports caused no doubt because of the stinking exchange rate for US dollars, but good if you want to buy cheap diesel from the US.... Product exports have gone from 1.4 mbpd to 1.85 mbpd in the last year.... So there is nothing too shocking on here, except for that annoying balance on crude oil that caused me to be directionally incorrect versus the analysts. Sometimes you win, sometimes you lose, as the old song says....
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memmel
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Post subject: Re: Weekly US Petroleum and NG Supply Reports 2009 Posted: Thu Oct 22, 2009 11:26 am |
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Joined: Wed Oct 31, 2007 12:00 am
Posts: 209
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pup55 wrote:
Note that the unleaded and distillate imports are both waaaay off.... these are net imports, of course, a lot of this is due to exports caused no doubt because of the stinking exchange rate for US dollars, but good if you want to buy cheap diesel from the US.... Product exports have gone from 1.4 mbpd to 1.85 mbpd in the last year....
Interesting thought. One wonders if the US could make it with no gasoline imports. We seem to have the refining capacity now to handle internal demand. If the dollar continues to weaken then gasoline imports into the US should continue to dry up simply because of exchange rates and assuming a open market exports would increase. ( At some point of course who needs a free market ?) If overall crude production is really falling rapidly then overtime the world should move to ensuring that local supply is met first i.e keep the guys that can burn your house down happy then on to exports. This is of course my double export land model for crude products in action. Now throw some monetary games on top of this with people trying to weaken their currencies vs the dollar or probably a bit later letting them rise so crude is relatively cheaper and the focus is on internal economies as export markets wane. Regardless a falling dollar only worsens our ability to import gasoline against a backdrop of a world probably increasingly less willing to export via open markets. Still to early to say but if we are reaching the point that our Achilles heel which is gasoline imports is becoming a problem then we can expect life to get interesting. Perhaps the need to import gasoline will be the key point that forces us to start increasing interest rates and defend the dollar. Or perhaps demand has fallen to the point that gasoline imports are no longer needed. Of course that means any growth that required renewed imports of gasoline would also require us to strengthen our currency sooner rather than later. Oil in general is a different beastie because of the dollar pegs either implicit or explicit in the oil exporting nations while gasoline imports generally come from countries with diversified economies that have other issues besides ensuring we get cheap gasoline. Another bit of the rope that forms the noose around our neck becomes clearer.
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pup55
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Post subject: Re: Weekly US Petroleum and NG Supply Reports 2009 Posted: Thu Oct 22, 2009 12:38 pm |
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Joined: Wed May 26, 2004 12:00 am
Posts: 4447
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http://www.valero.com/Financial%20Documents/Form%2010-K%202008%20FINAL.pdfhttp://www.valero.com/InvestorRelations/pages/FinancialNews.aspxYou know, I never appreciated until recently the critical nature of how a business is financed is to its long term health and potentially survivial. I am thinking of our favorite whipping boy Valero, who with refining capacity of 1.5 mbpd or about .45 gb per year as of the end of 2008 is about 10% of the market, if my estimating brain is working correctly today. These guys went fron refining capacity of 749 thousand barrels pwer day in 2002 to about 1.55 mbpd, by 2004, by purchasing and rehabbing a lot of old refineries that were running at the time. They accomplished this by borrowing a lot of money on the long term, because it was though that an investment in oil was infallible in those days. They might be doing about 2mbpd right now. At this point, as far as I can tell from their annual report, they had about $6.5B in debt, as of the end of 2008, closer to $7.3B right now, of which about $209M is due in December, and also their average interest rate, borrowed during the pre-credit crisis era, is about 6.6%, which as we know is stupidly high right now. If my calculation is correct, VLO is paying roughly 87 cents per BOD interest to service their debt at their current rate. Naturally this is just about enough to drive them from profitability to unprofitability, not through any sort of enginering efficiency, but because of the way the company was put together by financial leverage, which is good when it works, but terrible when it does not work. I think they are marginally cash-positive right now, even though they have some depreciation expense that puts them into the negative column on profits....so there does not appear to be any imminent danger that the whole company will go under....at the present time....and the bankers are letting them roll their debt over into the next year.... But it's dangerous, and you can see why if you could, cash and being free of debt would really work in your favor right now, if you were them. There is a lot of information about their refinery throughput, product mix, and efficiency on their website as well, by the way.
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Chief
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Post subject: Re: Weekly US Petroleum and NG Supply Reports 2009 Posted: Sat Oct 24, 2009 5:20 am |
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Joined: Fri Oct 31, 2008 12:00 am
Posts: 24
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VLO reports the 27th. I am expecting a very big loss and gloomy outlook. I used to own a bunch but don't anymore because I came to the conclusion their management team is doing a poor job. The last quarter they had something like 470m in derivatives trading losses and then they issued a ton of new stock. That was the final straw for me.
Recently there has been a run-up in their stock price but I would look for a large fall-off after the 3Q report.
Thanks Pup for all the hard work on this board.
Chief
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