Supply Up, Prices Down.

By: Daniel Guttman / May 23, 2016

For almost three weeks now we have been hammered with bullish sentiments that the market is going to rise, largely in part to crude outages as result of the Canadian wildfires and turmoil in Nigeria. However, as of early this morning it looks like $50/bbl will be harder to reach than was thought last week. Almost all major news sources and analysts are re-focusing on global over-supply, and there are three significant reasons to back it.

Iran has insisted that it will not freeze crude output, they have increased their exports, and affirms their 2 million bbls per day will reach 2.2 by mid-summer. As outlined in the graph below, Iran has in fact been rebuilding its energy industry ever since the sanctions have been lifted. Iran is both producing and exporting at the highest levels since late 2011 when the sanctions were put in place.

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Canadian crude oil is also on the rebound. Cooler weather the past six days and a little weekend rain has slowed the fires and two major oil producers have even resumed production.  After three weeks of wild infernos, two weeks of which 19 oil producers were shut down, roughly 2,000 square miles burnt to a crisp, and one million bbls/day of crude production lost, there may be light at the end of the tunnel. The evacuation order on seven oil sands producing facilities has been lifted.

Additionally, Libya’s eastern port of Hariga has reopened and since the deal has been made 660,000 bbls of crude has left the port.  This will now bring the number of bbls/day back up around 300,000 from the low of 200,000. Global over-supply of oil is undoubtedly the headline.  

As of post time, Crude is down $0.41, HO is down $0.0201 and RBOB is up $0.0044.

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Categories: Daily Market Update


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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