Crude Oil Analysis

Forex 2020

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According to the Energy Information Administration, U.S. crude inventories (excluding SPR) built by 14.9 million barrels last week to 1.415 billion, whereas SPR stock built by 2.1 million. They stand 129 mmb above the rising, rolling 5-year average and about 129 mmb higher than a year ago. Comparing total inventories to the pre-glut average (end-2014), stocks are 356 mmb above that average.
Production averaged 11.400 mmbd last week, down 100,000 b/d from the prior week, and 11.600 mmbd over the past 4 weeks, off 4.9 % v. a year ago. In the year-to-date, crude production averaged 12.580 mmbd, up 4.2 % v. last year, about 500,000 barrels per day higher than a year ago.
The EIA reported that it rose by 67,000 b/d v. last week at 6.529 mmbd. The 4-week trend in “Other Supply” averaged 6.499 mmbd, off 6.2 % over the same weeks last year. In YTD, they are 1.5 % higher than in 2019.
Crude oil production plus other supplies averaged 18.099 mmbd over the past 4 weeks, well below the all-time-high record.
Total crude imports rose by 2.003 mmb/d last week to average 7.200 mmbd last week. This figure was above the 4-week trend of 5.875 mmbd, which in turn was off 16.4 % from a year ago.
Net crude imports rose by 2.066 mmb/d because exports fell by 63,000 b/d to average 3.176 mmbd. Over the past 4 weeks, crude exports averaged 3.372 mmbd, 13.3 % higher than a year.
U.S. crude imports from Saudi Arabia rose by 947,000 last week to average 1.590 mmb/d. This reflected the surge in Saudi exports to the U.S., which began in late March after the price began between the Saudis and Russians. They had reportedly sent an armada of tankers carrying up to 50 million barrels to flood the U.S. market. Over the past 4 weeks, Saudi imports have averaged 840,000 b/d, up 91 % from a year ago.
Crude imports from Canada rose by 328,000 b/d last week, averaging 3.274 mmbd. Imports over the past 4 weeks averaged 3.072 mmbd, off 11.2 % v. a year ago.
Net oil imports averaged 236,000 b/d over the past 4 weeks. That compares to net oil imports of 1.345 mmbd over the same weeks last year. This is the first 4-week period this year in which imports exceeded exports.
Inputs rose by 87,000 b/d last week averaging 12.991 mmbd. Over the past 4 weeks, crude averaged 12.813 mmbd, off 22.8 % v. a year ago. In the year-to-date, inputs averaged 14.765 mmbd, off 9.6 % v. a year ago.
Over the past 4 weeks, crude oil supply exceeded demand by 515,000 b/d.Commercial crude stocks 534.4 mmb are now 57.9 million barrels higher than a year ago.
The bottoms in petroleum product demand and crude oil demand at refineries are clearly seen in the graphs. However, both crude and product stocks continue to rise as supplies still exceed demand.
Furthermore, the Saudi import surge has just been recorded in the customs data. We can expect to see the surge continue for another 3 weeks, ballooning crude stocks.
Oil prices have rebounded off the lows, but the oil market is not out of the woods yet. And it remains to be seen how robust the oil demand rebound will be with high unemployment and behavioral shifts due to the pandemic affecting oil demand.

OUR POSITION: We are Long Jun contract from 28.00 (May 14,2020) . Still on Market
 
 
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