Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Coronavirus: UK Parents Demand ALL Schools OPEN September, 7 Million Children Abandoned by Teachers - 9th Aug 20
Computer GPU Fans Not Spinning Quick FIX - Sticky Fans Solution - 9th Aug 20
Find the Best Speech Converter for You - 9th Aug 20
Silver Bull Market Update - 7th Aug 20
This Inflation-Adjusted Silver Chart Tells An Interesting Story - 7th Aug 20
The Great American Housing Boom Has Begun - 7th Aug 20
NATURAL GAS BEGINS UPSIDE BREAKOUT MOVE - 7th Aug 20
Know About Lotteries With The Best Odds Of Winning - 7th Aug 20
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
ARE YOU LOVING YOUR SERVITUDE? - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

U.S. Soaring Crude Oil Stocks - Cushing and Gulf Coast Storage Filling Up Fast

Commodities / Crude Oil Mar 05, 2015 - 12:14 PM GMT

By: EconMatters

Commodities

Cushing, Oklahoma

The weekly EIA Inventory report came out today regarding the state of the oil market from the supply side, and the numbers continue to paint a bearish picture of the oil market. For example, Cushing added another one and a half million barrels to storage this past week, that`s three million added over the last two weeks to storage facilities.


Gulf Coast Region


The Gulf Coast is even worse adding another 5 million barrels to storage last week, and over 9 million added to storage in the Gulf Coast region over the last two weeks. And we are still a long way from the summer driving season, we can build all the way up until May in some years, it is going to be quite interesting what happens when the storage facilities fill up completely.

Read More: Selling The Shale Boom: It's All About Reserves

Wholesale Product Supplies Bloated

One possible solution would be to ramp up all refineries to max capacity but the downside for that option is that gasoline and heating oil are already well above last year`s levels at the wholesale level, so not a lot of appetite by wholesalers to take on this suicide mission.

Bang the Close


Oil, WTI was up today on this bearish news but remember Oil is another one of the most manipulated markets out there, always has been, and seems like it always will be, they like to get everyone leaning bearish, and try to squeeze them at the close, one of the oldest tricks in the books for the oil market.

Read More >>> Solar in Oil Drilling:  Beat Them or Join Them?

In fact, many trading firms have been fined at the Oil majors for messaging and chatting the time old phrase “Bang them at the Close”, so this doesn`t really tell us anything regarding the oil market other than a bunch of traders got squeezed at the close on a bearish inventory report.

It happened last week and the following day they took oil where the report intuitively made common sense back to the $48 dollar a barrel level. This actually is a common occurrence in the oil market, take it up on a bearish inventory report, and sell it off the following trading day, as the newbies curse themselves over their ‘unfortunate luck’ at getting squeezed at the close as oil seemingly does the impossible!


20/40 Inventory Club


Lots of people are calling for a bottom in oil right now, maybe they are right, maybe new money has come into the market with the March Month of fund flows, but the actual inventory numbers are as bearish as ever. WTI is up around $4 on roughly 20 million barrels of inventory builds the last two weeks, and close to $8 on roughly 40 million barrels of inventory builds since the beginning of February. I know the CAP EX numbers have been cut, but this isn`t going to affect current production run rates anytime soon, and the U.S. Production numbers bear this point out. Still have to have some place to store all this oil!

Read More >>> The Oil Market QE Premium Is Coming out of Price

RIG Counts Misleading

The RIG Count has dropped also but this is a misnomer because unlike in ‘old fashioned drilling times’ where one Rig represented One well, now one RIG often represents multiple wells attached to the one Rig due to modern drilling technology. So many firms still have wells they are continuing to bring online for the existing Rigs which already have producing wells on those same Rigs, this helps explain why the Rig count is going down but the U.S. Production numbers keep climbing.


Next Leg Down

The smaller shale producers are still slightly profitable at current prices believe it or not, due to hedges and lower drilling costs as a result of technological innovation, and we haven`t seen any major consolidation plays so far with the big boys buying up the small producers. I think it will take the next leg down in the oil market for the small players to lower their asking price to fuel some major acquisition deals, a lot of analysts are calling for this as well. We had a cold winter, but it didn`t last near long enough to burn off the products side of the equation.

Inventory Builds Just Beginning

And now that winter is essentially behind us, and the summer driving season is still months away, here come the inventory builds, and we will see if in fact oil has bottomed or is going to take that dreaded next leg down, which all the small producers are holding out against hoping this scenario doesn`t come to fruition. Time will tell but today`s inventory report doesn`t show any light at the end of the tunnel, things look as bearish as ever from the supply side of the equation with demand remaining flat. Every week you think this will be the week where we get a slight drawdown, we even get an occasional tease with the API numbers, but then reality sets in with the EIA Numbers, and we set another storage record in the United States!

By EconMatters

http://www.econmatters.com/

The theory of quantum mechanics and Einstein’s theory of relativity (E=mc2) have taught us that matter (yin) and energy (yang) are inter-related and interdependent. This interconnectness of all things is the essense of the concept “yin-yang”, and Einstein’s fundamental equation: matter equals energy. The same theories may be applied to equities and commodity markets.

All things within the markets and macro-economy undergo constant change and transformation, and everything is interconnected. That’s why here at Economic Forecasts & Opinions, we focus on identifying the fundamental theories of cause and effect in the markets to help you achieve a great continuum of portfolio yin-yang equilibrium.

That's why, with a team of analysts, we at EconMatters focus on identifying the fundamental theories of cause and effect in the financial markets that matters to your portfolio.

© 2014 Copyright EconMatters - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

EconMatters Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules