Last quote by Matt Smith
Matt Smith quotes
It is still in testing the phase. The export ban was lifted last last year, and since then, we're seeing this evolution of the U.S. export industry, as there's this period of exploration to figure out how best to get these exports out, how to make this work economically.
That's 200,000 barrels that will be coming to market that someone else will have to cut to balance the market.
The solid builds to the products, despite being a seasonal trend, are helping to usher the crude complex lower.
The key to all of this is really is whether these cuts will be implemented. That is the big question.
Crude inventories have yielded a modest surprise draw in this week's report, led by a big drop in crude inventories on the East coast amid lower imports - even though refinery runs also dropped off.
The report is fairly neutral; mildly bullish crude, modestly bearish for the products.
On the whole, the report is a welcome distraction from OPEC talk, but fairly neutral on the whole.
They're clawing some of that market share from others, but they're also helping to fill that gap of increasing demand.
You think that prices dictate flows, but when it comes to China, it's such a large part of the market, it's the other way around. Their demand dictates prices.
The lifting of the U.S. export ban meant that WTI [crude oil] came back in line with other global benchmarks. Combine this with falling production from Bakken [shale formation], and it became more economical for U.S. East Coast refiners to import Nigerian crude rather than domestic crude by rail economics.
Most of the large exporters in the world have all been increasing exports in the last month, and this crude has to go somewhere. Even though U.S. production is ticking higher again, we're still seeing strong imports.
We are likely to get some sort of positive rhetoric out of the group. Saudi is trying to push for some sort of agreement, and should we get that, we should see a bit of a bump in prices.
Going forward, we should see refinery runs starting to increase, these refineries coming out of maintenance, and then a return to imports and a return to builds.
Until we get some actual physical barrels being taken off the market or we get some actual levels put in place, then it is just words and no action.
We are already seeing gasoline cargoes being redirected for the East Coast – both to avoid the storm, and to fill the supply loss after.
So you see false indicators to demand when people fill up tanks due to shortage fears and that adds another layer of complexity.
This decision was hasty and fails to recognize political realities on the ground.
I think it puts you deeper inside a game, deeper inside a universe or a situation that you've never imagined before.
It's much more stressful when we have unfair wind.
OPEC members including Venezuela, Ecuador and Kuwait are said to be behind this latest reincarnation. But just like previous endeavours, it seems doomed to fail, given key OPEC members (think: Saudi Arabia, Iraq, and Iran) persist in their battle for market share, ramping up exports apace.
Speculators increased their shorts by the biggest volume on record... for WTI crude..., dragging the net long position in WTI to its lowest since February. Another bearish development from the CFTC data has been gasoline positioning. Speculative positions in gasoline have moved to a record net short position as hedge funds bet on an ongoing gasoline supply glut.
I see it going lower from here. We have this glut here in the U.S. not only in crude but for products, as well. We're actually at record inventories for the two of those.
Ongoing fears of oversupply are encouraging hedge funds to liquidate their recent record bullish position; at the same time, we are also seeing a corresponding increase in speculative short positions.
Bullish momentum from a technical perspective, in cahoots with dovish Fed rhetoric, has this market on fire again despite the crude inventories we're seeing.
Distillates are the standout bullish element of the report and gasoline is the disappointment.
The material loss in production from the Kuwait strike has helped the oil market forget about the farce from Doha.
Who is actually going to be there to buy this stuff? If there's a legitimate party, they are going to demand a significant discount.
The data poses a bit of a conundrum, in that crude stocks still increased so much despite strong refining runs and an apparent drop in imports.
The comments out of Kuwait have encouraged the sell-off and it appears likely that a focus on weekly oil inventories will encourage prices lower.
It still feels like this is a sucker's rally. We've pushed higher on more talk and less action on supply balancing.
The IEA report was a bearish blow, followed by the EIA report, which sings from the same hymn sheet.
Geopolitical tension presents the greatest upside risk to the crude market, at least through the first half of the year.