Friday, September 22, 2017
O3 Oil: Oil is closing in on its largest third-quarter gain since 2004. The current pace is for an increase of nearly 16 percent this quarter.
OPEC: Some OPEC ministers, along with Russia and other non-OPEC producers are meeting in Vienna today to have preliminary discussions surrounding an extension of the current supply cuts. The talk is to extend the agreement beyond next March as some producers are finally seeing the cut's work as planned.
OPEC Compliance: A new high of 110% compliance of the OPEC cuts was reached in August. This may help add momentum to an extended cut as oil ministers are seeing what type of price points can be seen if things go to plan.
Europe Exports: Europe is set to export a record two million tons of diesel in September to Hurricane stricken Latin America.
Market Opinion: Front months still seems to have a bullish feel as we continue to approach fall harvest.
Thursday, September 21, 2017
OPEC: September 22nd is the next proposed date where OPEC will be discussing extending its production deal with non-OPEC oil producers to defend crude prices. The meeting will take place in Vienna according to Algeria's Energy Minister.
Russian Production: Russia's second largest oil producer, Lukoil, expects its output to rise over the next 8-10 years. The company's production has suffered as its oil fields are mostly located in Western Siberia.
North Korea: At least 8 North Korean ships left Russia this year, with a cargo of fuel headed back to their homeland despite declaring other destinations. Changing a ships destination is not forbidden and it's unclear if any fuel was unloaded in North Korea.
Inventory Report: Yesterday's DOE inventory report fell in line with the API report as a build was seen on crude oil (+4.591m) and draws on both RBOB (-2.125m) and heating oil (-5.693)
Market Opinion: The energy complex is seeing some retracing this morning as WTI and products are seeing losses. Focus has moved from US events to OPEC due to the announcement of tomorrow's meeting. Any new news could push crude oil farther past the $50 mark.
Wednesday, September 20, 2017
Middle East Demand: Asian buyers have been busy buying spot cargoes this month after Saudi Aramco and Abu Dhabi National Oil Company Cut supplies as heating oil production will be ramping up in the northern hemisphere.
Global Oil: US inventories are forecasted to rise as Brent crude is set for a 3rd quarter rise of nearly sixteen percent. The Iraqi Oil Minister suggests more output cuts are possible in the future.
Inventory Report: Yesterday's API report was mixed. WTI crude oil showed a build of (+1.4 mmbls), while refined products saw draws. Distillate saw the bigger of the two draws with expectations of (-6.1 mmbls) and gasoline (-5.0 mmbls).
Market Opinion: Crude oil prices are higher this morning, as are both gasoline and diesel after yesterday's API report. The Port Arthur fire is also supporting the bullish market as it had seen a fire yesterday, causing Valero to shut down a coker and may close other units at its refinery. Look for the DOE inventory report to help support a bullish market in the short term as Hurricane Maria approaches the US. Outer months look to be advantageous as there is a bit of backwardation in the market - keep that in mind for the upcoming Spring and even next Fall for any contracting needs.
Tuesday, September 19, 2017
Iraq: The Oil Minister of Iraq indicated that it does not see the need for more output cuts however, if there is a need the country will support consensus within the Organization of Petroleum Exporting Countries. Currently Iraq's oil supply cuts are around 260,000 bpd, exceeding its share of planned reduction.
Hedge Funds: Due to a shortage of refined fuels driving prices higher, hedge funds continue to waver, even despite refiners coming back online after the recent hurricanes.
US Output: Per the EIA, shale production in the United States is set to rise for the 10th consecutive month. Spurred by oil rising above fifty dollars a barrel, output across seven shale plays is forecasted to rise nearly 80k bbls to 6.1 mmbls per day.
Market Opinion: Oil is trading higher today and close to the five-month highs after news that key producers in the Middle East continue to cut supply to stay in line with OPEC's plan to end the supply glut. Hurricane Maria has been upgraded to a Category 5 storm and is following the same path Irma did. Geopolitical news is pushing the market higher ahead of the API and DOE inventory reports however the Gulf Coast coming back on line could cap any gains the market sees today.
Monday, September 18, 2017
Saudi Arabia: Crude exports for July fell to 6.693 million barrels from 6.889 in June.
North Korea: The United Nations security council has imposed new sanctions, capping fuel supply and has caused gas and diesel prices to rise sharply. Most of N. Korea gets its fuel from China and some from Russia.
Hurricane Aftermath: More than 22,000 barrels of oil, refined fuels and chemicals spilled across sites in Texas after Hurricane Harvey passed through. The spills cluster around the heart of the US oil industry and rank among some of the worst environmental events in recent years, falling short of 2005 - Hurricane Katrina.
Economic Report: The Housing Market index will be released today at 10am. Hurricane season analysts expecting the report to lose some ground by several points.
Market Opinion: The energy complex is starting the week sliding a bit as crude oil and refined products are reeling in a bit despite crude oil having its strongest week since mid-April. The market has mostly ignored US inventory builds over the past few weeks and last week focused on stronger demand from EIA. As refineries getting back to normal operations post hurricane season, demand for oil could get a bit of a boost in the next few weeks; any inventory builds could be seen as delayed imports unloading. WTI looks to hover around $50/barrel but will it sustain these levels despite refineries coming back online?
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