9/22/2015 Market Update

By: Daniel Guttman / September 22, 2015

What if I told you there was a crystal ball that predicted where crude was heading in the next 3-6 months? You would call my bluff and witness several different opinions on what this market is going to do. While crude currently sits at $45.20/bbl, Barchart.com predicts crude reaching $52-55/bbl by Halloween, and $62-65/bbl by the middle of Q1 of 2016. Here are their short-term views on the bullish outlook:

  • Baker Hughes announcing a long string of dropping rig counts as producers are cutting supplies.

  • U.S. oil production has fallen 9.1 mpbd which is 25% off recent highs. Industry forecasts are for production to fall even further to approximately 8.6 mbpd by mid-2016.

The Wall Street Journal stated that they see an increasing number of analysts and traders that have different expectations, compared to the above remarks. Back on August 19th, crude fell to a six year low below $41/bbl. As stated above, crude has rallied to approximately $45/bbl as we approach October. The analysts and traders think crude can dip into the $30 range with the global oversupply of crude and concerns about the Chinese economy moving forward.

 

 graph922

 

The chart above shows a four week moving average of the U.S. refinery demand in millions of barrels a day. As you can see, right around fall maintenance for refineries, there is a drop in demand. This should hurt crude prices, and add to the global oversupply of crude across the board.

 0922


Daniel Guttman

Written by

Daniel Guttman

With a background in wholesale and commercial sales as well as pipeline scheduling, Daniel is currently the Manager, Business Development in the Card Access Fuels department. He is tasked to find new and innovative solutions to increase sales opportunities for the sales team while managing and evaluating internal department processes. He assists with day to day personnel management, customer data analysis, as well as the daily Pacific Pride inventory and pricing direction.


Guttman Energy Daily Market Update Disclaimer – The information contained in this market update is derived from sources believed to be reliable; however this update could include technical inaccuracies or typographical errors and Guttman Energy does not guarantee the accuracy, completeness or reliability of this update. FURTHERMORE, THIS UPDATE IS PROVIDED "AS IS," WHERE IS, WITH ALL FAULTS AND WITHOUT ANY WARRANTY OR CONDITION OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY. GUTTMAN ENERGY ALSO SPECIFICALLY DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES. YOU USE THIS UPDATE AT YOUR SOLE RISK. This update and any view or comment expressed herein are provided for informational purposes only and should not be interpreted in any way as recommendation or inducement to buy or sell products, commodity futures or options contracts.


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