Damn Aliens!

Those nutty folks at Greenpeace keep thinking that the US economy can survive on “clean energy”, but everyone can have a dream.  They posted some pictures here on Flickr here: http://www.flickr.com/photos/greenpeaceusa09/sets/72157636481404455/

That’s a spill in North Dakota that kind of just went under the radar.  A mere 20K barrels spilled out into the Northern Plains.  The question is will I update my home page with a oil covered Prairie Dog.

A big Hump today

A few things this morning

  • Iran talks move on until November 7/8.  Yeah, I think we’ve been down this road before.  It just keeps getting pushed back and further back.
  • WTI futures is rallying strong and it’s probably because the shutdown/debt deal is about to get done.  Well we’re counting down from 12 hours here.
  • Technically the 60 minute chart is looking like it slipped past the channel resistance but is pulling back.  I hate charts, but like Rocky said in #4, “If I can change, you can change, we all can change!”

ECLX13 ~ 1 Hour_10162013_104933am

Insert “yawn” here

True to what we said we would do, we’re keeping the fanbase abreast of all and any market moving information.  Umm…  Yeah, nothing really doing here while we all wait and see what happens with the US budget deal.  Although, if we wanted a lot of “what if'” scenarios, there’s plenty to go around:

  • Oct 15/16 The P5 +1 meeting and we see if Iran is going to put up or shut up
  • Grangemouth oil refinery is set to shut in.  Now it’s not about losing this refinery as much as it is the ripple effect within the oil workers unions.
  • Wednesday and how the markets react with a lack of oil inventories.  I suppose we can put in the extra time on Tuesday afternoon with the API,  but for entertainment purposes only, we’re going to put out a Oil Outlooks Oil Inventory report at 10:30am EST.  Hey, who’s to say we’re wrong?

We’re busy…

Obviously we’re one of the few who are actually working.  We hear now that Grangemouth refinery workers are due to go on strike October 20th to the 22nd.  That’s one of the largest refineries in the UK at 210K b/d, but more importantly a major union.  The last time (2008) this started a strike that spilled over into the North Sea platform workers and halted 700K b/d of production of Brent crude.  This is no doubt going to again help push the WTI/Brent spread in favor of the Brent.  We talked briefly about the arb hitting -$10 and here we are today.

On a lighter note, we are seeing many oil data services busy trying to play make up for the expected loss of the EIA data.  API will be as normal and Genscape is going to try to make a splash.  OPIS will be putting out a gasoline and diesel report next week to get into the fray.  We don’t want our teeming millions to feel like we’re leaving them behind and we’ll be putting out a very special report on our own estimates on Wednesday for those special friends we call “members”!

Down goes Frazier…down goes EIA!

EIA shuts it’s doors and no report next week.  Well I guess the API charging for data wasn’t such a bad idea after all.  Now we’re in the same boat as the Econo-heads; no clue what’s going on.  If anything the market HATES a lack of information and uncertainty.  Should be a fun week ahead.

I(EA) caramaba!

Well I pride myself on getting up early to talk about the markets, but I couldn’t get myself to believe that this IEA report was all that.  Sure, US production is only going higher, but as I talked about in the morning Newsletter, global demand is damn strong.  China just took over the US as the world’s biggest oil importer.  If we ever do get serious about Japan making a comeback, all of this WTI is going to have a big job ahead to keep our export business strong.

Now I do think that everyone jumped the gun yesterday and we’re seeing a lot of that length second guessing today.  Well more like second selling.  We broke through that 10100 level that I was adamant about on the trade idea, but we held at 10060 instead of 10040.  That’s what I get for being greedy.  I’m hoping the HOCL will make up the difference.

With still no resolution in sight on the Government shutdown/debt ceiling, I think that we can’t believe they talk until we see it put to a vote.  That means lower here until the deal is done.  We may not get any push up if it is done because more people are coming to my side and figuring out a delay of a few weeks could be even worse in the big picture.  No Retail Sales numbers, no COT report later today, no good.

Spoiled of war?

With the recent rally in WTI (and obviously Brent) we think there’s time to make a little interjection.

First off let’s clarify the move in Brent.  This is what happens when a Libyan PM is kidnapped and we see a pipeline down in Nigeria (135K b/d).  There’s a lot that still is going on with the rest of the world and it’s the risk premium that is increasing.  Take that and the circus of a US government and better times are ahead for the rest of the world.  They’ve done a good job since 2009 and we think that can continue.

Now we do think that this chatter about Israel bombing a Syrian airport to keep Russian planes from delivering military equipment is another reason to remember that everything in the Middle East is far from settled.  Lest we not forget that the US is cutting off funding and guaranteeing debt to Egypt while our shut down continues.  So is oil bullish?  Oh yeah.  Would we rather be buying Brent here.  Definitely.

Now when we get back to the good old US of A, we have to think about this rally.  I don’t think that there’s any real value to buying into a short term debt deal.  If the GOP decides that they’ll stick out a 4-6 week olive branch, take a pass.  We wouldn’t be the only ones, I bet that President Obama would laugh that off too.  We need a longer term deal that starts with at least a year and see where that gets us.  Until then, I like CL higher from here, but only if Brent is leading.

Mark your calendar!

Marathon Garyville refinery (520K) is the biggest refinery in Louisiana and also headed into maintenance for about a month around October 15th.

This is going to ease the demand for crude in the US Gulf area, but if we’re looking at steady demand from here to the end of the year, products like gasoline and diesel could get tight.


Hate to think this is the first post for today to keep things fresh, but the break below 10300 definitely looks more technical than anything.  We’re hitting it prior to the “official” opening at 9:30am EST and the volume is showing that.  The 10min chart is showing a volume bar with about 6500.  Well there’s more ahead and it’s all going to all being on the EIA stats.

Here’s the BBG estimates:

10/4/13: U.S. Crude oil +940,000 bbls, Gasoline +570,000, Distillates -995,000 bbls and refinery util. -0.94% pt.


Refinery issues today

Fire at Marathon's Galveston Bay Refinery (450K). That's also known as BP's Amityville horror, Texas City. It has been a long while since we saw any problems with this refinery, but the inevitable is well, inevitable. So far there's nobody hurt, but production is still questionable.