Fueling Strategy: Please “KEEP YOU TANKS TOPPED TODAY/TONIGHT” prices are down 9 cents but will go UP 3 cents Saturday ~ Be Safe
NMEX Crude $ 79.97 UP $1.7100
NYMEX ULSD $2.7042 UP $0.0543
NYMEX Gas $2.6144 UP $0.0334
NEWS
April WTI crude oil on Friday up +1.71 (+2.19%), and Apr RBOB gasoline closed up +3.34 (+1.29%). Crude oil and gasoline prices on Friday closed moderately higher, with crude posting a 3-3/4 month high and gasoline posting a 5-1/2 month high. A weaker dollar on Friday was supportive of energy prices. Crude also has support on expectations that OPEC+ next week would extend its roughly 2 million bpd of crude production cuts beyond March. In addition, the ongoing attacks by Houthi rebels on commercial shipping in the Red Sea have disrupted Middle Eastern crude supplies and strengthened the U.S. physical oil markets as foreign buyers turn to U.S. crude supplies to avoid shipping issues. Crude prices fell back from their best levels Friday after weekly data from Baker Hughes showed active U.S. oil rigs rose to a 5-month high.
Crude prices are supported by concern that the Israel-Hamas war will widen to Lebanon. Hezbollah and Israel have traded fire almost daily since the Israel-Hamas war erupted on Oct 7. Also, the U.S. and UK have engaged in airstrikes against Houthi rebels in Yemen in retaliation for Houthi attacks on commercial shipping in the Red Sea. Attacks on commercial shipping in the Red Sea by Iran-backed Houthi rebels have forced shippers to divert shipments around the southern tip of Africa instead of going through the Red Sea, disrupting global crude oil supplies.
Friday’s U.S. economic news was weaker-than-expected and bearish for energy demand and crude prices. The Feb ISM manufacturing index unexpectedly fell -1.3 to 47.8, weaker than expectations of an increase to 49.5. Also, Jan construction spending unexpectedly fell -0.2% m/m, weaker than expectations of +0.2% m/m and the biggest decline in 15 months. In addition, the University of Michigan U.S. Feb consumer sentiment index was revised downward by -2.7 to 76.9, weaker than expectations of no change at 79.6.
Fueling Strategy: Please “WAIT TO FUEL UNTIL AFTER MIDNIGHT CST TONIGHT” prices will go DOWN almost 8 cents Friday AM~ Be Safe
NMEX Crude $ 78.26 DN $.2800
NYMEX ULSD $2.6838 UP $.0255
NYMEX Gas $2.3043 UP $.0333
NEWS
April WTI crude oil closed down 0.28, and Apr RBOB gasoline closed up +3.33, ULSD closed up +2.55. Crude oil and gasoline prices this morning are moderately higher. Expectations that OPEC+ next week will extend its roughly 2 million bpd of crude production cuts beyond March are underpinning crude prices. Also, the ongoing attacks by Houthi rebels on commercial shipping in the Red Sea have disrupted Middle Eastern crude supplies and strengthened the U.S. physical oil markets as foreign buyers turn to U.S. crude supplies to avoid shipping issues. Dollar strength and today’s weaker-than-expected U.S. economic news limit gains in crude prices.
Today’s U.S. economic news was weaker-than-expected and bearish for energy demand and crude prices. Weekly initial unemployment claims rose +13,000 to 215,000, showing a weaker labor market than expectations of 210,000. Also, the Feb MNI Chicago PMI unexpectedly fell -2.0 to 44.0, weaker than expectations of an increase to 48.0 and the steepest pace of contraction in 7 months. In addition, Jan pending home sales unexpectedly fell -4.9% m/m, weaker than expectations of an increase of 1.5% m/m and the biggest decline in 5 months.
Crude prices are supported by concern that the Israel-Hamas war will widen to Lebanon. Hezbollah and Israel have traded fire almost daily since the Israel-Hamas war erupted on Oct 7. Also, the U.S. and UK have engaged in airstrikes against Houthi rebels in Yemen in retaliation for Houthi attacks on commercial shipping in the Red Sea. Attacks on commercial shipping in the Red Sea by Iran-backed Houthi rebels have forced shippers to divert shipments around the southern tip of Africa instead of going through the Red Sea, disrupting global crude oil supplies.
Fueling Strategy: Please “PARTIAL FILL ONLY TODAY/TONIGHT” prices are up 7.5 cents but will go DOWN 2 cents Thursday ~ Be Safe
NMEX Crude $ 78.54 DN $.3300
NYMEX ULSD $2.6583 DN $.0877
NYMEX Gas $2.2710 DN $.0734
NEWS
April WTI crude oil closed down -0.33, and Apr RBOB gasoline closed down -7.34, and ULSD closed down – 8.77 Crude oil and gasoline prices this morning gave up an early advance and are moderately lower, with crude falling from a 3-1/2 month high on a bearish weekly EIA inventory report. Also, today’s rally in the dollar index to a 1-week high is weighing energy prices. Crude prices today initially moved higher due to ongoing tensions in the Middle East and expectations that OPEC+ next week will decide to extend roughly 2 million bpd of crude production cuts beyond March.
Today’s global economic news was weaker-than-expected and bearish for energy demand and crude prices. U.S. Q4 GDP was revised downward by -0.1 to 3.2% (q/q annualized) from the previously reported 3.3%. Also, the Eurozone Feb economic confidence index unexpectedly fell -0.7 to 95.4, weaker than expectations of an increase to 96.6.
Crude prices are supported by concern that the Israel-Hamas war will widen to Lebanon. Hezbollah and Israel have traded fire almost daily since the Israel-Hamas war erupted on Oct 7. Also, the U.S. and UK have engaged in airstrikes against Houthi rebels in Yemen in retaliation for Houthi attacks on commercial shipping in the Red Sea. Attacks on commercial shipping in the Red Sea by Iran-backed Houthi rebels have forced shippers to divert shipments around the southern tip of Africa instead of going through the Red Sea, disrupting global crude oil supplies.
Fueling Strategy: Please “KEEP YOU TANKS TOPPED TODAY/TONIGHT” Wednesday prices will jump UP over 7 cents ~ Be Safe
NMEX Crude $ 78.87 UP $1.2900
NYMEX ULSD $2.7460 DN $0.0167
NYMEX Gas $2.3444 UP $0.0388
NEWS
April WTI crude oil on Tuesday closed up +1.29 (+1.66%), and Apr RBOB gasoline closed up +3.72 (+1.45%). On Tuesday, crude oil and gasoline prices climbed to 2-week highs and closed moderately higher. Geopolitical risks are underpinning crude prices with the ongoing Israeli-Hamas war and continued attacks by Houthi rebels on commercial shipping in the Red Sea. Gains in crude oil were limited after Libya said it restarted crude production in its Wafa oil field, which was shut down for two days because of protesters.
Crude prices are supported by concern that the Israel-Hamas war will widen to Lebanon after the leader of Hezbollah said it would retaliate against Israel and hit “not just army sites” in Israel after Israel attacked positions and killed civilians in Lebanon. Hezbollah and Israel have traded fire almost daily since the Israel-Hamas war erupted on Oct 7. Also, the U.S. and UK have engaged in airstrikes against Houthi rebels in Yemen in retaliation for Houthi attacks on commercial shipping in the Red Sea. Attacks on commercial shipping in the Red Sea by Iran-backed Houthi rebels have forced shippers to divert shipments around the southern tip of Africa instead of going through the Red Sea, disrupting global crude oil supplies.
Crude prices also have support from Ukrainian drone attacks on Russian refineries and oil storage facilities that have curtailed Russian fuel exports. On Feb 3, a drone attack by Ukraine damaged Russia’s Lukoil PJSC facility in Volgograd, which processed 289,000 bpd of crude oil in January, or more than 5% of Russia’s total crude processing volume. On Jan 25, a drone attack damaged Russia’s Rosneft PJSC’s major Tuapse refinery on Russia’s Black Sea coast. Russia said on Jan 26 that the Tuapse refinery, which processed 180,000 bpd of crude in the first half of January, will be shut down through at least February. In recent weeks, several Russian oil processing and storage facilities have been targeted and damaged by Ukrainian drone attacks, increasing the risks of reducing Russian crude exports.
Fueling Strategy: Please “FUEL AS NEEDED” today/tonight ~ Please Be Safe
NMEX Crude $ 77.58 UP $1.0900
NYMEX ULSD $2.7627 UP $0.0730
NYMEX Gas $2.3056 UP $0.0289
NEWS
April WTI crude oil on Monday closed up +1.09 (+1.43%), and Apr RBOB gasoline closed up +4.79 (+1.91%). Crude oil and gasoline prices on Monday shook off early losses and settled moderately higher. A weaker dollar on Monday was bullish for energy prices. Also, the disruption to some Libyan crude exports is supportive of crude. In addition, a jump in the crude crack spread Monday to a 5-month high is positive for crude prices.
Disruptions to Libya’s crude exports signal smaller global supplies that are bullish for crude after protesters forced the closure of Libya’s Wafa oil field, which produces 40,000 bpd to 45,000 bpd.
Strength in the crude crack spread supports crude prices as the crack spread Monday rose to a 5-month high. The higher crack spread encourages refiners to boost their crude purchases and refine them into gasoline and distillates.
Crude prices are supported by concern that the Israel-Hamas war will widen to Lebanon after the leader of Hezbollah said it would retaliate against Israel and hit “not just army sites” in Israel after Israel attacked positions and killed civilians in Lebanon. Hezbollah and Israel have traded fire almost daily since the Israel-Hamas war erupted on Oct 7. Also, the U.S. and UK have engaged in airstrikes against Houthi rebels in Yemen in retaliation for Houthi attacks on commercial shipping in the Red Sea. Attacks on commercial shipping in the Red Sea by Iran-backed Houthi rebels have forced shippers to divert shipments around the southern tip of Africa instead of going through the Red Sea, disrupting global crude oil supplies.
Fueling Strategy: Please “KEEP YOU TANKS TOPPED TODAY/TONIGHT” prices are down 3 cents but prices will go UP 5 cents Saturday then drop 6 cents Sunday ~ Be Safe
NMEX Crude $ 76.49 DN $2.1200
NYMEX ULSD $2.6897 DN $0.0623
NYMEX Gas $2.2767 DN $0.0580
NEWS
April WTI crude oil on Friday closed down -2.12 (-2.70%), and Apr RBOB gasoline closed down -5.82 (-2.27%). Crude oil and gasoline prices on Friday retreated on concern about Chinese energy demand. Crude was also under pressure from signs that Israel will join peace talks in Paris on the Hamas war, which could reduce some geopolitical risk. A weaker dollar and a rally in the S&P 500 to a record high on Friday were positive factors for crude prices.
Crude prices fell back Friday after Reuters reported Thursday night that Israel will send negotiators to truce talks in Paris today to talk about a ceasefire in the war with Hamas and a return of Israeli hostages. RBC Capital Markets said domestic oil demand in China has been soft, and limited stimulus measures from the government have been disappointing. Also, the growth in diesel inventories since the middle of 2023 is “a worry.”
Fueling Strategy: IF possible, Please “PARTIAL FILL ONLY” today/tonight, Prices are down 7.5 cent BUT will continue to drop another 3 cents Friday ~ Be Safe
NMEX Crude $ 78.61 UP $.7000
NYMEX ULSD $2.7520 UP $.0468
NYMEX Gas $2.3347 UP $.0487
NEWS
Crude oil futures rose Thursday amid signs of a tightening global market and as the geopolitical outlook in the Middle East remains uncertain. The WTI contract for April gained 70 cents, or 0.9%, to settle at $78.61 a barrel. The Brent Contract for April added 64 cents, or 0.77%, to settle at $83.67 a barrel. The price premium of the first month futures contracts over the following months has increased in recent weeks, according to UBS strategist Giovanni Staunovo. A premium for immediate versus later delivery is typically a sign that the oil market is tightening, Staunovo wrote in a note to clients Thursday.
The market may be tightening due to winter storms in North America last month that knocked out 1.4 million barrels per day of global crude production, Staunovo wrote. The weather-related disruptions happened at the same time India’s oil demand rose 8.2% year over year in January. Meanwhile, compliance with OPEC+ production cuts has increased with exports down about 900,000 barrels in February, the lowest level since August, according to Staunovo. “We retain a modestly positive outlook as we expect the oil market to remain slightly undersupplied this year,” Staunovo wrote.
In the U.S., commercial crude stockpiles rose by 3.5 million barrels last week while total inventory including finished products was largely flat, according to the Energy Information Administration. U.S. stockpiles have increased in recent weeks as the refinery utilization rate has dropped.
The geopolitical outlook in the Middle East remains uncertain as the U.S. works toward a cease-fire in Gaza while tensions escalate on the Israel-Lebanon border and in the Red Sea. Israel War Cabinet member Benny Gantz said Wednesday that efforts to “promote a new outline” to secure the release of hostages held in Gaza “indicate the possibility of moving forward.”
White House Middle East envoy Brett McGurk will meet with Israeli Prime Minister Benjamin Netanyahu Thursday to discuss efforts to free hostages held by Hamas. A temporary cease-fire in exchange for releasing hostages in Gaza would potentially reduce the risk of the conflict engulfing the Middle East and disrupting crude supplies. But Israel has launched repeated strikes against Hezbollah targets in Lebanon in recent days, and Houthi militants in Yemen continue to attack shipping in the Red Sea.
Fueling Strategy: Please “PARTIAL FILL ONLY” today/tonight, Thursday prices will drop 7.5 cent ~ Be Safe
NMEX Crude $ 77.91 UP $.8700
NYMEX ULSD $2.7052 DN $.0263
NYMEX Gas $2.2860 UP $.0086
NEWS
April WTI crude oil on Wednesday closed up +0.87 (+1.13%), and Apr RBOB gasoline closed up +2.22 (+0.88%). Crude oil and gasoline prices posted moderate gains on Wednesday. Dollar weakness Wednesday was supportive of energy prices. Also, geopolitical risks continue to underpin crude prices with the possible escalation of the Israel-Hamas war to Lebanon and attacks on commercial ships in the Red Sea by Yemen’s Houthi rebels. Weakness in stocks Wednesday undercut confidence in the economic outlook and limited the upside in crude prices. A surge in the crude crack spread is bullish for oil prices as the crack spread Wednesday jumped to a 5-month high. The stronger crack spread encourages refiners to boost their crude oil purchases to refine more gasoline and distillates.
Global economic news Wednesday was supportive of energy demand and crude prices. Japan’s Jan exports rose +11.9% y/y, stronger than expectations of +9.5% y/y and the biggest increase in 14 months. Also, the Eurozone Feb consumer confidence indicator rose +0.6 to -15.5. Crude prices are supported by concern that the Israel-Hamas war will widen to Lebanon after the leader of Hezbollah said it would retaliate against Israel and hit “not just army sites” in Israel after Israel attacked positions and killed civilians in Lebanon. Hezbollah and Israel have traded fire almost daily since the Israel-Hamas war erupted on Oct 7. Also, the U.S. and UK have engaged in airstrikes against Houthi rebels in Yemen in retaliation for Houthi attacks on commercial shipping in the Red Sea. Attacks on commercial shipping in the Red Sea by Iran-backed Houthi rebels have forced shippers to divert shipments around the southern tip of Africa instead of going through the Red Sea, disrupting global crude oil supplies.
Crude prices also have support from Ukrainian drone attacks on Russian refineries and oil storage facilities that have curtailed Russian fuel exports. On Feb 3, a drone attack by Ukraine damaged Russia’s Lukoil PJSC facility in Volgograd, which processed 289,000 bpd of crude oil in January, or more than 5% of Russia’s total crude processing volume. On Jan 25, a drone attack damaged Russia’s Rosneft PJSC’s major Tuapse refinery on Russia’s Black Sea coast. Russia said on Jan 26 that the Tuapse refinery, which processed 180,000 bpd of crude in the first half of January, will be shut down through at least February. In recent weeks, several Russian oil processing and storage facilities have been targeted and damaged by Ukrainian drone attacks, increasing the risks of reducing Russian crude exports. A decline in Russian crude oil exports is supportive of crude oil prices. Tanker-tracking data from Vortexa, monitored by Bloomberg, shows Russian crude exports in the week to Feb 11 fell about -290,000 bpd from the prior week to 3.49 million bpd. Strong oil-product consumption in India, the world’s third largest crude consumer, is bullish for oil prices after India’s Jan oil-product consumption rose +8.3% y/y to 20 MMT, the most in 9 months.
A decline in crude in floating storage is bullish for prices. Monday’s weekly data from Vortexa showed that the amount of crude oil held worldwide on tankers that have been stationary for at least a week fell -19% w/w to 73.18 million bbl as of Feb 16.
On Nov 30, OPEC+ agreed to cut crude production by -1.0 million bpd through June 2024. However, a Bloomberg survey on Thursday showed the group cut production by only -490,000 bpd in January, less than the official -1.0 million bpd cut. Meanwhile, on Dec 21, Angola announced it was leaving OPEC amid a dispute over oil production quotas. Saudi Arabia said on Nov 30 that it would maintain its unilateral crude production cut of 1.0 million bpd through Q1-2024. The move would maintain Saudi Arabia’s crude output at about 9 million bpd, the lowest level in three years. Russia also said it will deepen its voluntary oil export cuts by 200,000 bpd to 500,000 bpd in Q1 of 2024. OPEC Jan crude production fell -1.59 million bpd to 26.570 million bpd, a 2-1/2 year low.
The consensus is that Thursday’s weekly EIA crude inventories will climb by +3.75 million bbl. Last Wednesday’s EIA report showed that (1) U.S. crude oil inventories as of Feb 9 were -2.1% below the seasonal 5-year average, (2) gasoline inventories were -2.2% below the seasonal 5-year average, and (3) distillate inventories were -7.9% below the 5-year seasonal average. U.S. crude oil production in the week ended Feb 9 was unchanged w/w at a record high of 13.3 million bpd. Baker Hughes reported last Friday that active U.S. oil rigs in the week ended Feb 16 fell by -2 rigs to 497 rigs, just above the 2-year low of 494 rigs posted on Nov 10. The number of U.S. oil rigs has fallen over the past year from the 3-3/4 year high of 627 rigs posted in December 2022.
Fueling Strategy: Please “FUEL AS NEEDED” today/tonight ~ Please Be Safe
NMEX Crude $ 78.18 DN $1.0100
NYMEX ULSD $2.7315 DN $0.0751
NYMEX Gas $2.2774 DN $0.0586
NEWS
March WTI crude oil on Tuesday closed down -1.01 (-1.28%), and Mar RBOB gasoline closed down -5.86 (-2.51%). Crude oil and gasoline prices on Tuesday gave up overnight gains and posted moderate losses. Crude fell back from a 3-1/2 month high Tuesday as weakness in stocks undercut economic optimism and was negative for energy demand and crude prices. Crude initially moved higher Tuesday after the dollar index dropped to a 2-week low. Also, oil prices have support from concerns about the possible escalation of the Israel-Hamas war to Lebanon and attacks on commercial ships in the Red Sea by Yemen’s Houthi rebels. Weakness in the crude crack spread is bearish for oil prices as the crack spread Tuesday fell to a 5-week low. The weaker crack spread discourages refiners from purchasing crude oil and refining it into gasoline and distillates.
Global economic news Tuesday was mixed for energy demand and crude prices. On the negative side, U.S. Jan leading indicators fell -0.4% m/m, weaker than expectations of -0.3 % m/m and the fifteenth consecutive monthly decline. Conversely, Eurozone Dec construction output rose +0.8% m/m, the largest increase in 10 months.
Crude prices are supported by concern that the Israel-Hamas war will widen to Lebanon after the leader of Hezbollah said it would retaliate against Israel and hit “not just army sites” in Israel after Israel attacked positions and killed civilians in Lebanon. Hezbollah and Israel have traded fire almost daily since the Israel-Hamas war erupted on Oct 7. Also, the U.S. and UK have engaged in airstrikes against Houthi rebels in Yemen in retaliation for Houthi attacks on commercial shipping in the Red Sea. Attacks on commercial shipping in the Red Sea by Iran-backed Houthi rebels have forced shippers to divert shipments around the southern tip of Africa instead of going through the Red Sea, disrupting global crude oil supplies.
Crude prices also have support from Ukrainian drone attacks on Russian refineries and oil storage facilities that have curtailed Russian fuel exports. On Feb 3, a drone attack by Ukraine damaged Russia’s Lukoil PJSC facility in Volgograd, which processed 289,000 bpd of crude oil in January, or more than 5% of Russia’s total crude processing volume. On Jan 25, a drone attack damaged Russia’s Rosneft PJSC’s major Tuapse refinery on Russia’s Black Sea coast. Russia said on Jan 26 that the Tuapse refinery, which processed 180,000 bpd of crude in the first half of January, will be shut down through at least February. In recent weeks, several Russian oil processing and storage facilities have been targeted and damaged by Ukrainian drone attacks, increasing the risks of reducing Russian crude exports.
A decline in Russian crude oil exports is supportive of crude oil prices. Tanker-tracking data from Vortexa, monitored by Bloomberg, shows Russian crude exports in the week to Feb 11 fell about -290,000 bpd from the prior week to 3.49 million bpd.
Fueling Strategy: Please “KEEP YOU TANKS TOPPED TODAY/TONIGHT” prices are down 8.5 cents but will go UP 1.50 cents Saturday ~ Be Safe
NMEX Crude $ 79.19 UP $1.1600
NYMEX ULSD $2.8066 DN $0.0171
NYMEX Gas $2.3360 UP $0.0177
NEWS
March WTI crude oil on Friday closed up +1.16 (+1.49%), and Mar RBOB gasoline closed up +1.77 (+0.76%). Crude oil and gasoline prices on Friday posted moderate gains, with crude oil climbing to a 2-1/2 month high. Concern about an escalation of the Israel-Hamas war to Lebanon has increased geopolitical risks in the Middle East and is underpinning crude prices after Hezbollah vowed to increase attacks on Israel. A weaker dollar on Friday was also supportive of energy prices. Crude prices are supported by concern that the Israel-Hamas war will widen to Lebanon after the leader of Hezbollah said it would retaliate against Israel and hit “not just army sites” in Israel after Israel attacked positions and killed civilians in Lebanon. Hezbollah and Israel have traded fire almost daily since the Israel-Hamas war erupted on Oct 7. The continuation of the war threatens to escalate and widen throughout the Middle East, a region that accounts for about a third of the world’s oil output.
Gasoline prices have support amid unexpected refinery outages in the U.S. that reduced gasoline supplies. Recent shutdowns at large refineries, including BP Plc’s Whiting, Indiana facility and a Phillips 66 unit in Ponca City, Oklahoma, have contributed to tighter U.S. gasoline supplies
A decline in Russian crude oil exports is supportive of crude oil prices. Tanker-tracking data from Vortexa, monitored by Bloomberg, shows Russian crude exports in the week to Feb 11 fell about -290,000 bpd from the prior week to 3.49 million bpd.
Strong oil-product consumption in India, the world’s third largest crude consumer, is bullish for oil prices after India’s Jan oil-product consumption rose +8.3% y/y to 20 MMT, the most in 9 months. A negative factor for crude prices was Thursday’s report from the International Energy Agency (IEA) that said the crude market could be in surplus all during 2024. The IEA predicted global oil demand in 2024 will increase by +1.2 million bpd, just half last year’s rate. Also, the IEA said cuts to crude production by OPEC+ have been smaller than announced, with the group’s crude output falling by just -330,000 bpd in January, much less than the announced cuts of -900,000 bpd. A bearish factor for crude was a report Sunday from Goldman Sachs Group that said there is a 600,000 bpd downside risk to its forecast for Chinese oil demand in Q4 due to China’s macro policy and a recent surge of electric vehicle sales in the country.
Geopolitical tensions in the Middle East continue to support crude prices. The U.S. and UK have ramped up airstrikes against Houthi rebels in Yemen in retaliation for Houthi attacks on commercial shipping in the Red Sea. Last month, the U.S. Navy advised vessels to avoid the southern Red Sea. Houthis started attacking ships in the Red Sea in mid-November in support of Hamas in the Israeli-Hamas war and said they won’t stop the attacks until Israel ends its assault on Gaza. Attacks on commercial shipping in the Red Sea by Iran-backed Houthi rebels have forced shippers to divert shipments around the southern tip of Africa instead of going through the Red Sea, disrupting global crude oil supplies.
Crude prices also have support from Ukrainian drone attacks on Russian refineries and oil storage facilities that have curtailed Russian fuel exports. On Feb 3, a drone attack by Ukraine damaged Russia’s Lukoil PJSC facility in Volgograd, which processed 289,000 bpd of crude oil in January, or more than 5% of Russia’s total crude processing volume. On Jan 25, a drone attack damaged Russia’s Rosneft PJSC’s major Tuapse refinery on Russia’s Black Sea coast. Russia said on Jan 26 that the Tuapse refinery, which processed 180,000 bpd of crude in the first half of January, will be shut down through at least February. In recent weeks, several Russian oil processing and storage facilities have been targeted and damaged by Ukrainian drone attacks, increasing the risks of reducing Russian crude exports. An increase in crude in floating storage is bearish for prices. Monday’s weekly data from Vortexa showed that the amount of crude oil held worldwide on tankers that have been stationary for at least a week rose +0.5% w/w to 84.17 million bbl as of Feb 9.
On Nov 30, OPEC+ agreed to cut crude production by -1.0 million bpd through June 2024. However, a Bloomberg survey on Thursday showed the group cut production by -490,000 bpd in January, below the agreed-upon -1.0 million bpd cut. Meanwhile, on Dec 21, Angola announced it was leaving OPEC amid a dispute over oil production quotas. Saudi Arabia said on Nov 30 that it would maintain its unilateral crude production cut of 1.0 million bpd through Q1-2024. The move would maintain Saudi Arabia’s crude output at about 9 million bpd, the lowest level in three years. Russia also said it will deepen its voluntary oil export cuts by 200,000 bpd to 500,000 bpd in Q1 of 2024. OPEC Jan crude production fell -1.59 million bpd to 26.570 million bpd, a 2-1/2 year low.
Wednesday’s EIA report showed that (1) U.S. crude oil inventories as of Feb 9 were -2.1% below the seasonal 5-year average, (2) gasoline inventories were -2.2% below the seasonal 5-year average, and (3) distillate inventories were -7.9% below the 5-year seasonal average. U.S. crude oil production in the week ended Feb 9 was unchanged w/w at a record high of 13.3 million bpd.
Baker Hughes reported Friday that active U.S. oil rigs in the week ended Feb 16 fell by -2 rigs to 497 rigs, just above the 2-year low of 494 rigs posted on Nov 10. The number of U.S. oil rigs has fallen over the past year from the 3-3/4 year high of 627 rigs posted in December 2022.
