Saudi Arabia: How Hot Is It?

By: Angela Agostinone / August 10, 2016

Yesterday, WTI closed down $0.25 to $42.77/bbl, RBOB closed down $0.0158 to $1.3462/gal, and HO finished down $0.0129 to $1.3307/gal.  The market as of 8:45 a.m. ET is down $0.13/bbl on WTI, up $0.0072/gal on HO, and up $0.0050/gal on RBOB.  This is in response to the API statistics that were released last night. The API statistics showed a 2.1 million barrel build in crude inventories, in which 1.3 million barrels came from Cushing, OK.  Both refined products had a draw; distillates had a 1.6 million barrel draw, and gasoline had a 3.9 million barrel draw. 

Saudi Arabia’s oil production for July is a new record high at 10.67 million barrels per day.  This was to meet the summer domestic demand needed by power companies to ensure air conditioning to homes and offices during extremely hot months. 

saudi_record.png

As well as increased production due to hot temperatures, Saudi Arabia needed to keep up with Russia and Iran.  Saudi Arabia used to lead in sales to China, one of the world’s biggest energy consuming nations, but now has competition with Russia.  In the chart below from Bloomberg, it shows the number of imports to China from Russia and Saudi Arabia are now almost equal or greater from Russia. Up until 2015 it clearly shows how much control Saudi Arabia had.

russia_vs_saudi.png

The DOE statistics released this morning were similar to the API report.  The DOE stats showed:

Crude inventories: +1.1 million barrels; Cushing: +1.2 million barrels

Distillates: -1.9 million barrels

Gasoline: -2.8 million barrels

 The draw in distillates has HO up almost a penny, but the smaller than expected gasoline draw has RBOB down almost a penny, and WTI is trading almost flat.


Categories: Daily Market Update


Angela Agostinone

Written by

Angela Agostinone

Angela manages daily price changes from suppliers to ensure Guttman Energy customers are getting the most current and competitive rack prices. She is also responsible for relaying supplier product allocations to Guttman Energy's sales and logistics team, as well as analyzing specific benchmarks such as OPIS, Platts, and Argus to ensure each customer is getting the greatest value from their contracted fuel purchases.


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