The EIA published its weekly oil report today, and the story remains headlined by lower demand restoring inventory levels. Gasoline consumption was 5.5% lower than last week, helping a recovered refinery system and high imports increase its inventory back toward normal levels. Distillates/diesel inventories fell another half a million barrels to the bottom of the average range for this time of year. But 12% lower demand (more…)
Posts Tagged ‘Hurricane Gustav’
Recession’s low demand drives oil prices further down
Wednesday, October 8th, 2008Alarming Trend of Lower Oil Production Continues
Tuesday, October 7th, 2008Ever since 2004, the non-OPEC world has struggled to increase its oil production from a plateau around 50 million barrels per day. Today’s EIA Short-Term Energy Outlook (STEO) now projects that 2008 non-OPEC production will actually decrease by more than 200,000 barrels per day. As I have been stressing in recent blogs, the EIA has been constantly lowering its non-OPEC production predictions throughout the year. As recently as February, they thought non-OPEC producers would supply 900,000 barrels per day more in 2008. Their current prediction couldn’t be too far off now that (more…)
Oil markets focus on lower demand, Hurricanes leave mark
Wednesday, September 10th, 2008The bullish weekly oil report that I predicted arrived on schedule. But the oil markets largely ignored it. Crude supplies fell 5.9 million barrels (Mb) but remain in the average range while gasoline supplies fell a huge 6.5 Mb to an extremely low level for this time of year. Hurricane Ike has strengthened and will keep Gulf production low for at least (more…)
Non-OPEC oil production pessimism increases, Hurricane Ike shifts
Tuesday, September 9th, 2008The US Energy Information (EIA) Short Term Energy Outlook (STEO) for the month of September came out this afternoon with more startling updates on non-OPEC oil production. They cut their prediction of non-OPEC oil production again, bringing it to 20,000 barrels per day higher than in 2007 (revised from a guess of a 900,000 barrel per day increase made just seven months ago in February’s STEO). If the estimate falls next month by a similar amount to the last seven months’ cuts, we will be looking at a repeat of the oil production decrease that (more…)
Strengthening dollar overpowers bullish oil report
Thursday, September 4th, 2008A bullish report by the EIA showing declines in inventories of crude oil, gasoline, and distillates was not enough to buck the downward trend in oil prices due to a strengthening dollar and continued weak demand picture. The dollar rose to its highest this year at ~$1.435 per euro, 10.5% stronger than the July high of $1.6038 per euro. Next week’s report will show the impact of Hurricane Gustav. Since most refineries and crude production facilities are still offline, I guestimate that the numbers will come out very bullish with losses that bring crude, gasoline, distillates and propane near record lows for this time of year. The fact that oil rigs are not as damaged as post-Katrina and Rita is very fortunate, but (more…)
Hurricane Gustav not as bad as feared, oil prices fall
Tuesday, September 2nd, 2008Hurricane Gustav weakened to a Category 2 storm as it hit the Louisiana Gulf Coast, a smaller and weaker hurricane than Katrina or Rita. On Saturday when Gustav whirled to almost Category 5 strength, many analysts worried that Gustav may damage rigs and pipelines enough to reduce production by 50 million barrels over the next few months (similar to the level of Katrina and Rita in 2005). But from the first reports of minor flooding and damages, Gustav appears to be more similar to Hurricane Isidore of October 2002 which reduced production by (more…)
Natural Gas injection dulls Gustav’s Price Power
Thursday, August 28th, 2008Some more good news for natural gas consumers: the weekly EIA report shows inventories grew much faster than usual for this time of year. A gain of 102 billion cubic feet (bcf) brought total storage levels to 2,757 bcf. It is still 6.8% below last year’s level but now a substantial 2.6% above the 5-year average. This development temporarily took the wind out of Tropical Storm Gustav’s ability to (more…)
All eyes on Hurricane Gustav
Wednesday, August 27th, 2008After soaking southwestern Haiti, Gustav is reentering the Caribbean Sea to gain its strength back south of Cuba as it makes its way toward the Gulf of Mexico. Current projections are for the tropical storm to regain hurricane wind speeds over the next 36 hours before growing to a substantial storm that may hit offshore oil and gas rigs and then the Gulf coast around Louisiana near the end of this weekend. As we saw with Fay, these storms are unpredictable (ASIDE: thanks Fay for giving my home state of North Carolina some much-needed rain!). But the potential production disruption has oil and natural gas prices up over (more…)
Hurricane Gustav & Mexico production declines
Tuesday, August 26th, 2008The first major hurricane of the 2008 season is churning its way toward oil and gas rigs in the Gulf of Mexico — sending prices up even though the dollar is strong today. Gustav turned from a new Tropical Depression yesterday to a Category 1 Hurricane today as it passes over southern Haiti. NOAA forecasters predict it will remain over water south of Cuba and then hit the Gulf as a Category 3 or 4 storm gathering strength from the warm water. This would threaten to shut down Gulf of Mexico fields that equal (more…)