• 3 hours Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 4 hours Oil Gains Spur Growth In Canada’s Oil Cities
  • 5 hours China To Take 5% Of Rosneft’s Output In New Deal
  • 5 hours UAE Oil Giant Seeks Partnership For Possible IPO
  • 6 hours Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 7 hours VW Fails To Secure Critical Commodity For EVs
  • 8 hours Enbridge Pipeline Expansion Finally Approved
  • 9 hours Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 10 hours OPEC Oil Deal Compliance Falls To 86%
  • 1 day U.S. Oil Production To Increase in November As Rig Count Falls
  • 1 day Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 1 day Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 1 day EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 1 day Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 1 day Aramco Says No Plans To Shelve IPO
  • 4 days Trump Passes Iran Nuclear Deal Back to Congress
  • 4 days Texas Shutters More Coal-Fired Plants
  • 4 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 4 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 4 days Chevron Quits Australian Deepwater Oil Exploration
  • 5 days Europe Braces For End Of Iran Nuclear Deal
  • 5 days Renewable Energy Startup Powering Native American Protest Camp
  • 5 days Husky Energy Set To Restart Pipeline
  • 5 days Russia, Morocco Sign String Of Energy And Military Deals
  • 5 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 5 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 5 days India Needs Help To Boost Oil Production
  • 5 days Shell Buys One Of Europe’s Largest EV Charging Networks
  • 5 days Oil Throwback: BP Is Bringing Back The Amoco Brand
  • 5 days Libyan Oil Output Covers 25% Of 2017 Budget Needs
  • 5 days District Judge Rules Dakota Access Can Continue Operating
  • 6 days Surprise Oil Inventory Build Shocks Markets
  • 6 days France’s Biggest Listed Bank To Stop Funding Shale, Oil Sands Projects
  • 6 days Syria’s Kurds Aim To Control Oil-Rich Areas
  • 6 days Chinese Teapots Create $5B JV To Compete With State Firms
  • 6 days Oil M&A Deals Set To Rise
  • 6 days South Sudan Tightens Oil Industry Security
  • 7 days Over 1 Million Bpd Remain Offline In Gulf Of Mexico
  • 7 days Turkmenistan To Spend $93-Billion On Oil And Gas Sector
  • 7 days Indian Hydrocarbon Projects Get $300 Billion Boost Over 10 Years
Alt Text

What’s Stopping An Oil Price Rally?

Oil prices rallied in Q3…

Alt Text

Is OPEC Considering Deeper Output Cuts?

You could argue OPEC and…

Alt Text

3 Stocks To Play Today’s Hottest Market

Big automakers have jumped on…

Congress To Lift Export Ban, WTI Crawls Closer To Brent

Congress To Lift Export Ban, WTI Crawls Closer To Brent

Sixty-nine years after the birth of ABBA’s Benny Andersson, and the name of the game for the crude complex today is to navigate the tricky business of a weekly inventory report and the conclusion of the US Federal Reserve FOMC meeting.

Last night’s API report has put the wobbles on expectations for today’s weekly EIA inventory report, as a 2.3 million barrel build was seen. A solid draw was seemingly expected from the EIA report, as refining ramps up; correspondingly, builds are forecast for the products. We are, however, in the realm of ad valorem tax season, so we could well see Gulf Coast stockpiles drop again (hark, down 7 million barrels last week) as inventories are drawn down to avoid end-of-year taxation.

In terms of the Federal Reserve FOMC meeting, today will (surely) be the first time the US has seen interest rates rise in nine-and-a-half years (it has got to happen, right??!!).

Onto economic data flow, and Eurozone inflation data has been similar to what we saw from both the US and UK yesterday: a clambering away from deflationary terrain. The preliminary Eurozone manufacturing PMI for December has come in better than expected, while the services print was worse (the data is awfully early too, brought forward due to Yuletide timing). Related: Forget Oil Majors, Stripper Wells Offer Better Returns

UK unemployment ticked down to 5.2 percent the lowest level since mid-2008, while Brazil saw its best data point for what seems like months (it probably is), as retail sales surprisingly ticked higher (0.6 percent) on the prior month (but are still down -5.6 percent YoY). Ahead of the Fed, in the U.S. we have had both building permits (+11 percent MoM) and housing starts (+10.5 percent MoM) come in better than expected. U.S. industrial production, however, has produced its worst monthly drop since late 2012, dropping 0.7 percent:

U.S. industrial production, MoM (source: investing.com)

Congressional leaders have agreed to lift the ban on US oil exports, which has been in place for the last forty years, as part of a broad package relating to spending and tax legislation. While both the House and Senate still need to approve the deal – as well as President Obama signing it into law – it is expected to see a relatively smooth passage given the package has been sweetened by the addition of environmental and renewable measures, including the renewal of wind and solar tax credits. Related: Finally Some Good News For The U.S. Oil Industry?

Saudi Aramco, Saudi Arabia’s state-run oil company, is set to invest billions of dollars into refining projects in Asia, from Indonesia to Vietnam, as it looks to consolidate its market share in the key global region. By purchasing stakes in Asian refineries, Saudi Aramco can put supply contracts in place to ensure future delivery of Saudi oil.

This is a tactic which has worked very well in the past, illustrated by the joint ventures through Motiva Enterprises on the U.S. Gulf Coast, which ensure Saudi Aramco has a foothold in the US market.

By 2025, Saudi Aramco looks to double its refining capacity to 10 million barrels per day. As our ClipperData illustrate, Saudi has exported ~60 percent of its crude to Asia so far this year. The second largest recipient of Saudi crude is North America, with well over one million barrels per day arriving on North American shores this year, the vast majority of which goes to the U.S. Gulf Coast. Related: LNG Glut Worse Than Oil

By Matt Smith

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News