Back to Basics

By: Matt Rosenberg / July 5, 2016

With the shock of the UK Brexit political event somewhat in the rear view mirror, the oil market seems to be back to basics as the fundamental rule of supply and demand is moving the market this morning. 

On the supply side of the equation, OPEC’s crude production showed an increase of almost a quarter of a million barrels per day in June to 32.88 million for the month.  Nigeria with repairs to their war torn pipelines increased output by 90,000 bpd.  Saudi Arabia increased as well by 70,000 bpd as is typical in the summer months to generate electricity to power air conditioners.  Libya’s production was ramped up in June as rival officials within the country eased up on blocked shipments that took place in May.  On the demand side, one analyst summed up the situation saying “earlier this year there was a lot of hope that gasoline would lead crude higher, that’s not turned out to be the case and gasoline will soon be a weight on the market.“  In its monthly report on June 30 the Energy Information Administration said that demand for April decreased by over 250,000 bpd.  Another analyst reacted to that saying “the monthly data for April raises doubts about the idea that we have reliably robust gasoline demand to support the entire complex.”  Additional EIA data show gasoline stockpiles along the East Coast surged to a record 72.5 million barrels in the week ended June 24 as imports to the region reached a six-year seasonal high.75pic.png

In morning news, a three year study out of Rystad Energy in Norway estimates that recoverable oil in the U.S. to be 264 billion barrels of reserves.  This figure surpasses Russia and Saudi Arabia which have 256 billion barrels and 212 billion barrels of recoverable oil respectively.  With over half of the reserves in the U.S. tied to shale oil, the cost of production of course still plays a major factor as Saudi Arabia can pump oil for less than $10 a barrel versus the approximate cost of $40 a barrel here at home.

Currently, crude is down $2.49 to $46.50, RBOB is down over 9 cents, and HO is down 7 cents.        75set.png


Categories: Daily Market Update


Matt Rosenberg

Written by

Matt Rosenberg

As a key accounts manager, Matt helps large customers make mission-critical decisions by providing timely advice regarding market conditions.


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.


Comments

Subscribe to our blog

Price Feed

Stay up-to-date on current fuel prices and market trends with our NYMEX price feed (15 minute delay to the live market).

© 2018 Market data provided and hosted by Barchart Market Data Solutions. Fundamental company data provided by Morningstar and Zacks Investment Research. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer.

Categories

Contact Us