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Oil Price Volatility Increases On OPEC Outages

Refinery

Friday September 14, 2018

In the latest edition of the Numbers Report, we’ll take a look at some of the most interesting figures put out this week in the energy sector. Each week we’ll dig into some data and provide a bit of explanation on what drives the numbers.

Let’s take a look.

(Click to enlarge)

Key Takeaways

- Crude inventories fell again, dropping below the 400-mb range for the first time since February 2015. The significant drawdown helped push up oil prices.
- However, gasoline inventories rose yet again, offsetting some of the crude draw.
- Refinery runs are still extremely high, but should come down in the weeks ahead. That could ease the pressure on crude stocks while leading to some drawdowns in gasoline inventories.

1. U.S. upstream capex rising quickly

(Click to enlarge)

- U.S. upstream capex has been soaring since 2016, despite promises of capital discipline from a long line of shale executives.
- U.S. upstream capex has more than doubled from $40 billion in 2016 to $100 billion this year, according to Bank of America Merrill Lynch.
- “This increase in spending is most evident in the rig and frac spread counts, which have also nearly doubled over the same period,” BofAML said in a note. “[B]ut these data points are more meaningful when accounting for efficiency and productivity gains that producers have achieved over the same period.”

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