Oil supplies sink near 24 year lowgreenspun.com : LUSENET : TB2K spinoff uncensored : One Thread
Oil supplies sink near 24-year low API also reports drop in gasoline, distillate stocks
By Myra P. Saefong, CBS.MarketWatch.com Last Update: 6:19 PM ET Aug 8, 2000 NewsWatch Latest headlines
NEW YORK (CBS.MW) - Crude futures rallied in after-hours trading Tuesday after a key report showed a sharp drop in crude supplies that brought total inventories near 24-year lows.
After the market closed Tuesday, the American Petroleum Institute said supplies of crude, as of the week ended Aug. 4, fell 2.1 million barrels to total 282.6 million. Analysts expected a rise between 3.2 million and 3.5 million barrels, according to a Bridge News survey.
It was the second sharp decline in as many weeks.
"Tacking on" an additional 2.144 million-barrel drop to the 9 million-barrel draw reported last week "is going to basically make traders very concerned over supplies," commented Phil Flynn, a senior energy analyst at Chicago-based brokerage Alaron.com.
In after-hours trading, September crude added 25 cents to $29.67 a barrel.
"Traders must be concerned considering that we are sitting near 24-year lows as we head into the winter season," he said, adding that the 24-year low for API inventories was hit in January of this year at 282 million barrels. The Energy Department's 24-year low was also hit that month at 282.8 million.
"Thus far, extra oil from OPEC hasn't appeared and the market cannot deny the situation," he said.
"These kind of numbers two weeks in a row will turn up the cooker as far as political comments go," he added. The market will now await confirmation from the Energy Department, which will release its data early Wednesday.
Distillate inventories, which include heating oil, dropped 1.2 million barrels, although supplies were expected to be up by 1.9 million to 2.2 million barrels.
"The most concerning is the draw in distillate stocks. This is the time of year we should be building these stocks dramatically," Flynn said. "Unless something changes dramatically and quickly," supplies will be very tight during the wintertime, he added.
Gasoline supplies also fell 1.7 million barrels, compared to Bridge News-polled analysts expectations for a drop between 1.1 million and 1.5 million barrels.
Refinery production rates, according to the API, reached 95.2 percent, down from the prior week's reading of 96 percent.
EIA report slows Tuesday rally
A U.S. government report on the crude outlook for 2001 took some of the steam out of the market's upward move Tuesday, although futures prices did close above $29 a barrel.
On the New York Mercantile Exchange, September crude rose 21 cents to close at $29.12 a barrel after rising to an intraday high at $29.34.
September heating oil climbed 1.62 cents to 79.83 cents per gallon and September unleaded gasoline added 1.48 cents to 86.28 cents per gallon.
The Energy Information Administration, the reporting arm of the Energy Department, predicted that supplies will exceed demand this year.
"World supply in 2000 (76.6 million barrels per day) is expected to exceed demand (75.8 million barrels per day), leading to a reversal of the downshift in petroleum inventories in industrialized countries observed since mid-1999," the EIA report said.
In addition, the report noted that "while average crude prices will have risen over $9 per barrel in 2000, an average decline of $4 to $5 per barrel is seen for 2001."
In the equities markets, the Oil Service Index (OSX: news, msgs) added 2 percent while the CBOE Oil Index (OIX: news, msgs) fell by 0.6 percent.
Within the respective indexes, shares of R&B Falcon (FLC: news, msgs) gained 1 11/64 to close at 23 and shares of Chevron (CHV: news, msgs) fell 21/64 to 80 3/8. See related story.
Storm threat boosts natural gas
Meanwhile, natural gas continued to see support from the possibility that Hurricane Alberto may affect production in the Gulf of Mexico.
September natural gas rose 6.1 cents to close at $4.409 per million British thermal unit.
The hurricane remains "a supportive psychological factor, although it could turn toward the northwest at almost any juncture, disappointing the bulls," said Tim Evans, a senior energy analyst at New York-based IFR Pegasus, in a daily report.
Meanwhile, "the balance of the weather outlook is supportive, with enough heat in the outlook to suggest that storage injections (the climb in inventories) may soon begin falling short of 1999 levels again," he said.
-- Cave Man (firstname.lastname@example.org), August 08, 2000
Anyone ever hear about J.I.T. inventorying to max. cash? Over the weekend an article discussed one "trader's" view that Heating Oil was "confusing" because dealers/distributors and Jobbers were reluctant to stock pile at these recent highs because it would be foolish if prices declined.
That followed another article in which another Genius declared (and I posted here as the Duh of the day): ".......if we have a cold winter, prices will rise and if its a mild winter, prices will fall......" ***********..........DUH.........*******************
-- cpr (email@example.com), August 08, 2000.
It looks like this Winter oculd suffer heating fuel shortages like last year. I still have 25 cords of wood left from last year because the utilities did not crash. Those who can may want to store up heating fuel now, or start cutting wood.
-- John (firstname.lastname@example.org), August 08, 2000.
As if JIT was just invented.... LOL
America,,US$,, is going to have suck a little harder on that pipe...
-- Will (email@example.com), August 09, 2000.
Northeast to Face Heating Oil Shortage Refiners Dip Into Stockpile to Make Trucks' Diesel Fuel USA TODAY By James R. Healey and Dina Temple- Raston
June 26, 2000
While politicians and the populace battle to place blame for record- high gasoline prices in Chicago, a worse fuel problem is looming.
Those who heat with oil will shiver this winter -- and pay a premium. Just 15.3 million barrels of heating oil are stockpiled for the East Coast, which uses 75% of the nation's heating oil in the winter. That's well down from 41.3 million barrels on hand last June. And even that healthier inventory wasn't enough to prevent supply problems and high prices last winter.
''We're setting ourselves up for something more apocalyptic than last year,'' frets Tom Kloza, chief oil analyst with Oil Price Information Service, an independent firm.
At the end of last year, heating oil prices in the East averaged $1 a gallon, up from 79 cents a year earlier, and prices briefly touched $2 a gallon some places last winter. The Energy Information Administration (EIA) forecasts $1.11 a gallon in the fourth quarter this year.
Others say it'll be a lot more. ''If we have a cold winter early, we could end up seeing in heating oil what we're seeing in gas prices -- in spades,'' says Bill O'Grady, oil analyst at A.G. Edwards & Sons. ''The problem is, this heating oil thing is an outright shortage.''
He says a gallon will average $1.40, for those who can get it, if crude oil prices stay around $30 a barrel and everything else is perfect -- no refinery fires, pipeline breaks or severe weather.
''There is a potential issue looming out there with respect to inventories,'' says Tom Mueller, spokesman for BP Amoco. ''And we're monitoring that now.''
Others are too.
''We're not forecasting a crisis situation, but stay tuned,'' says Neil Gamson, analyst at EIA, which supplies data to the Department of Energy.
While they aren't broadcasting it, federal officials are privately saying they are worried that shortages in 2000 will be worse than in 1999. Last year was so bad, the Coast Guard cut through ice in Boston to ease the way for tankers. And the administration waived limits on how many hours truckers could drive in order to speed distribution of heating oil.
The problem is relatively simple. Refiners don't have the capacity to meet current needs and also build stockpiles of heating oil. They are using their capacity to produce distillates to make diesel fuel. The hot economy means big rigs are sucking down prodigious amounts of diesel delivering all the cars, appliances and computers that people are buying. Producing diesel that can be sold immediately at high prices is better business than using that capacity to produce heating oil that won't sell for months and won't command big prices unless the weather is harsh.
''Nobody wants to produce heating oil and have it sitting in Boston in July when there's no demand for it,'' Kloza says.
Refiners have a huge shortfall to make up, ''and I don't know how they are going to do that,'' O'Grady says.
''We're trapped. All we can hope for is a mild winter.''
-- Cave Man (firstname.lastname@example.org), June 28, 2000
-- (email@example.com), August 09, 2000.
U.S. Oil Levels At 'Gas Crunch' Lows
* Crude Oil Inventories Haven't Been This Low Since 1976
* Saudi Arabia Promises To Boost Production
NEW YORK, August 8, 2000 (Reuters) U.S. crude oil inventories fell more than two million barrels last week, dropping to their lowest level since March 1976, according to the American Petroleum Institute (API).
Crude oil inventories fell 2.144 million barrels during the week ending August 4 to 282.602 million barrels, just about 17 million barrels higher than the 265.8 million barrel level reached in March 1976, during the oil shock, according to an API statistician.
The large drop in inventories last week caps a mammoth nine million barrel stock draw reported by the API for the week before, shocking a petroleum market which has long anticipated increasing supplies from the Organization of Petroleum Exporting Countries (OPEC).
OPEC kingpin Saudi Arabia said earlier this summer it was planning to up its production of crude oil as a measure to help ease high fuel prices globally.
)2000 Reuters Limited. All Rights Reserved.
-- (firstname.lastname@example.org), August 09, 2000.
I think the petroleum industry is just begging itself to be nationalized. Two winters in a row of heating oil crisis would be too much, except that a lame duck administration wouldn't have the incentive it would have with at least another year to go.
-- Whatever (email@example.com), August 09, 2000.
Crude tops $30 on low U.S. supplies API, Energy Department say stocks near record lows
By Myra P. Saefong, CBS.MarketWatch.com Last Update: 2:16 PM ET Aug 9, 2000 NewsWatch Latest headlines
NEW YORK (CBS.MW) -- Oil shares gained and crude futures rallied above $30 a barrel Wednesday after a weekly report on U.S. supplies confirmed that crude inventories are inching their way to their lowest levels since 1976.
New 24-year lows for the American Petroleum Institute and Energy Department measures of inventories were hit last January at 282 million barrels and 282.8 million barrels, respectively, according to Phil Flynn, a senior energy analyst at Alaron.com. Listen to the interview.
This week, the API and government data revealed that crude supplies stand at 282.6 million and 285.4 million, respectively.
On the New York Mercantile Exchange, September crude rose $1.10 to $30.22 a barrel. The contract hadn't surpassed the $30 level since July 20.
September heating oil climbed 3.37 cents to 83.20 cents per gallon, and September unleaded gasoline added 1.52 cents to 87.80 cents per gallon. September natural gas climbed 3.1 cents to $4.44 per million British thermal units.
In the equities markets, the Oil Service Index (OSX: news, msgs) added 3 percent while the CBOE Oil Index (OIX: news, msgs) rose by 1.5 percent.
Within the respective indexes, shares of Transocean Sedco Forex (RIG: news, msgs) added 3 3/16 to 54 1/16 and shares of Chevron (CHV: news, msgs) gained 2 33/64 to 82 7/8 in recent trading.
The more than 9 million-barrel decline in API crude stocks during the week ended July 28, combined with little movement reported in either direction this week, prompts concerns that petroleum inventories are not climbing enough to meet with upcoming heating season demand, according to Allan Brady, an economist at the Dismal Scientist.
Oil supplies near lowest levels since 1976
After the market closed Tuesday, the American Petroleum Institute said supplies of crude, as of the week ended Aug. 4, fell 2.1 million barrels to 282.6 million. Analysts expected a rise between 3.2 million and 3.5 million barrels, according to a Bridge News survey.
Early Wednesday, the Energy Department reported a 1.3 million-barrel rise in crude stocks. However, total inventories at 285.4 million remained near the 24-year low.
Meanwhile, distillate inventories, which include heating oil, dropped 1.2 million barrels last week, the API said, although supplies were expected to be up by 1.9 million to 2.2 million barrels.
The Energy Department said inventories fell 500,000 barrels.
The API reported that gasoline supplies also fell 1.7 million barrels, compared to Bridge News-polled analysts' expectations for a drop between 1.1 million and 1.5 million barrels. The Energy Department said supplies fell 1.7 million.
Refinery production rates, according to the API, reached 95.2 percent, down from the prior week's reading of 96 percent.
In other news, the Energy Information Administration announced expectations Tuesday that supplies will exceed demand this year.
"World supply in 2000 (76.6 million barrels per day) is expected to exceed demand (75.8 million barrels per day), leading to a reversal of the downshift in petroleum inventories in industrialized countries observed since mid-1999," the EIA report said. It also noted that average crude prices will likely see an average decline of $4 to $5 per barrel in 2001.
-- Cave Man (firstname.lastname@example.org), August 09, 2000.