The Department of Energy (DOE) inventory summary reported a fifth consecutive week of crude oil stocks draws, surprising the market and providing another bullish kick in oil's advance towards the $50 plateau. Though, ultimately, the November WTI did not cross that threshold during the day, it seems a question of only when, not if, that will happen (and, in fact, WTI did move above $50 around 8:30 this morning).
The DOE report showed large draws in both crude oil and distillate products, adding a spark to a market that didn't need much to continue its advance. All told, crude oil stocks have declined more than 25-million barrels in the last five weeks and are below 500-million barrels in total for the first time since January this year. Read more
Oil prices rose for the fourth consecutive session on Monday, in the process setting new, three-month highs, on continued momentum building buying following last week's special summit between major global oil producers. Since last Wednesday, when OPEC (et al) announced it would limit production starting next year, November WTI has risen by over four dollars and is within one strong move of breaching the $50 barrier (last seen in late June). (Plus update on impact of Hurricane Matthew) Read more
Overnight Wednesday and into Thursday morning the energy market was weaker, as participants took a break from Wednesday's torrid pace. However, despite some seeing the OPEC news as a non-event, during U.S. market hours on Thursday, prices were pulled higher again.
PLUS: Hurricane Matthew in the Caribbean escalated to a Category 2 Hurricane with maximum sustained winds of 100 mph at 2:00am this morning. Read more
In a day full of surprises, the oil market rocketed higher and posted significant gains in all of the major product categories. The biggest news (and surprise) of all was the formal pledge by OPEC to limit the cartel's oil production at 32.5 million barrels per day, a figure which is several hundred thousand barrels per day less than current production levels. While the rubber stamp will occur at OPEC's next, official meeting (scheduled for late November), and the production trimming won't happen for a few months, the fact that there was an agreement at all shocked most market participants. OPEC has not had any formally announced production cut since 2008, and output has been steadily rising over the past few years (to be fair, so has world demand and the "call" on, or need for, OPEC's oil). Read more
The oil market slumped on Tuesday after the special oil producer summit failed to deliver on bullish hopes for output cuts. While post-meeting comments indicate there was at least extended discussion on a production freeze, the biggest parties at the table (namely, Saudi Arabia and Iran) have fundamental differences on forward production targets. Read more
The oil market ended a volatile week on a substantial negative note, as the market is now focused on this week's special "not really a meeting" OPEC gathering in Algeria to see if the world's state run oil producers formulate a plan on near term oil production. There is still much skepticism as to whether Saudi Arabia and Iran can agree on such a plan, and also whether a tacit agreement will actually result in compliance. Since the meeting this week is really unofficial, it would be surprising if anything firm is announced, with headlines and comments likely having more immediate impact on flat price moves. Colonial Pipeline continues to operate in normal fashion, per their updates, and supply problems should ease in the coming days and weeks. Read more
Colonial Pipeline continues to run at normal rates, a day after "Line 1" resumed operations. So far, there are no reports of additional integrity issues in the regular line or the bypass line. Read more
Colonial Pipeline announced successful completion of the "Line 1" bypass, and plans to begin limited operations on Wednesday. Though initial pump rates will likely be limited, and the gasoline supply situation through the Southeast will still be tight in the near term, the strong efforts by Colonial and its response team have alleviated longer term worries about gasoline.
The Environmental Protection Agency and several state governments have relaxed protocol on RVP timing (allowing earlier switch to winter grade gas) in an effort to get as much gasoline to the public as possible. Tuesday's announcement of the "Line 1" restart is a big step towards returning towards normalcy.
Colonial Pipeline (CPL) continued it's "Line 1" bypass work over the weekend and into Monday, with the same end of week forecast for re-start of the main gasoline line. Gasoline shipments are ongoing, albeit at very slow rates, on "Line 2". Delivery schedules are accordingly pushed back through the entire system. CPL is active with updates, though understandably there is quite a bit of uncertainly on repairs, timing and supply. Read more
Colonial Pipeline started to ship gasoline on its main distillate line ("Line 2") on Friday, and has also begun working on a line bypass to work around the leak on the gasoline line ("Line 1"). The temporary bypass line is several hundred feet long, and fits into the narrative that Colonial hopes to have "Line 1" restarted at some point later this week. Read more