Last week began with the celebration of Martin Luther King Day in the U.S.. In this regard, trading on the New York Mercantile Exchange was closed, and at the IPE in London were quite low. On Tuesday, the market fluctuated in a narrow range of $ 47.70-$ 48.34 per barrel, there will continue to report on the March futures on crude oil grades WTI. Actually, the fact of the arrival of frost in the Northeast U.S. was standard and the impact on the reaction of the market, but the expectation of the output of oil in the U.S., went on Wednesday, kept lifting profits.
On Wednesday, oil prices eventually fell nearly 100 points to $ 47.56 a barrel. According to the EIA, commercial stocks of crude oil in the U.S. for the week ending 14 January, grew by 3.4 million barrels to 292.2 million barrels. Inventories of gasoline rose by 1.7 million barrels to 217.0 million barrels. The resulting volume at 9.5 million barrels higher than during the same period last year, and is located above the upper border of the average range calculated for this time of year. Stocks of distillate products, which include heating oil and diesel, rose by 800,000 barrels to 123.8 million barrels. Current stock levels of products of distillation at 6.8 million barrels lower than a year ago and is located near the lower limit of the average range calculated for this time of year. Just note that after the statistics, the price of oil fell. The market, purely and simply, record profits into the parish of severe frosts in the U.S.. The growth of oil and distillate products was the signal for action, though these, in my opinion, went "bovine" character.
First, stocks of distillate products increased only by increasing the stock of diesel fuel at 1.4 million barrels to 73.6 million barrels. The point is that the increase in the production of heating oil in the heating season entails the formulation of excess quantities of diesel fuel, demand for which is
being lowered. Inventories as a key winter product, which is heating oil (fuel oil) for the week ending 14 January, fell to 500,000 barrels to 49.1 million barrels. The resulting volume of oil reserves at 2.1 million barrels, 4.1%, lower than the same period last year.
On the other hand, reduced the supply of oil to U.S. refineries, which amounted to 15.2 million barrels per day, which is 395,000 barrels less than a week earlier. It seems that by reducing oil supplies to refineries increased commercial stocks, as oil imports rose slightly, to an average of 10.1 million barrels per day, compared with 10.0 the previous week. Another "bovine" factor was the decline in manufacturing capacity utilization rate of U.S. refineries, which fell to 91.5% from 94% a week earlier. Production of distillate products has fallen from a record high 4.3 million barrels per day to 4.0 million barrels a day. While the average demand over the past four weeks has been at the level of 4.2 million barrels a day. These "bull" market factors have remembered on Thursday. After a decline in prices of electronic bidding by the end of the day returned to the level of opening, completing the day at $ 47.60 a barrel.
All the past week in the northeast U.S. temperatures were below normal levels for this time of year. According to the forecasts of frost is expected and the weather forecaster for the weekend. In such circumstances, traders do not like to open short positions before the weekend, much less keep them on Monday. By reducing the withdrawal could lead only to profit, but it happened from Wednesday to Thursday. As a result, oil prices rebounded on Friday to the maximum of eight. The March futures for oil varieties WTI, traded on NYMEX rose by $ 1.22 to $ 48.53 a barrel - its highest closing since 30 November.
At the IPE in London March "Brent" rose $ 1.41 to $ 45.73 a barrel. By the bovine factor, of course, include disruptions of oil production in the North Sea and Iraq, as well as upcoming events and 30 January. I recall that on the day scheduled meeting of OPEC ministers in Vienna and parliamentary elections in Iraq. According to the statements of U.S. security and Iraq, the activity of the terrorist attacks will be strengthened, not only before January 30, but after the elections. The situation in the Middle East, of course, will contribute to higher prices. As for the meeting OPEC, it is likely that the quota of oil production will not be reduced. Until January 30 the price of crude oil will rise to $ 51.50 a barrel, roughly, but in this case does not make sense to reduce the quota. OPEC can always reduce the production, regardless of official quotas. This decision will further signal to the withdrawal of profits, after reaching this level. But the most interesting thing is that all this is, to date, scratch weather factor. The situation in the northeast U.S. is rather complicated. According to the forecasts of weather forecaster, arctic attack corridor extends from Boston to Philadelphia. The combination of heavy snowfall and cold temperatures will have a strong psychological impact on the market for energy futures. Northeastern U.S. consumes about 80% of heating fuel, and given the expanding corridor of cold weather, high demand for oil will be celebrated almost throughout the North Atlantic states, let alone the Midwest. According to forecasts by 30 January the air temperature in the North-east, on average, will remain at 15-20 degrees Fahrenheit below normal levels for this time of year. Let me remind you that the normal temperature in New York for this time of year is considered to be 25 Fahrenheit (-4 Celsius) and in Boston 21 Fahrenheit (-6 Celsius).
There is another nuance, testifying in favor of higher oil prices. Typically, U.S. refineries in January are for the maintenance for the prevention of work related to the transition of production of gasoline as the main product. Last week, some refineries have reduced production due to the seasonal service - in the future, will be stopped and the rest. All this will reduce the production of heating oil on a background of increased demand. As a result, January 26, EIA statistics show another decline in stocks of fuel oil, and most likely the products of distillation, leading to a new surge in oil prices upwards. In such a situation, one can recommend one - not to sell. Open positions Buy - in order to retain the $ 51.00-$ 51.50 per barrel.
On Wednesday, oil prices eventually fell nearly 100 points to $ 47.56 a barrel. According to the EIA, commercial stocks of crude oil in the U.S. for the week ending 14 January, grew by 3.4 million barrels to 292.2 million barrels. Inventories of gasoline rose by 1.7 million barrels to 217.0 million barrels. The resulting volume at 9.5 million barrels higher than during the same period last year, and is located above the upper border of the average range calculated for this time of year. Stocks of distillate products, which include heating oil and diesel, rose by 800,000 barrels to 123.8 million barrels. Current stock levels of products of distillation at 6.8 million barrels lower than a year ago and is located near the lower limit of the average range calculated for this time of year. Just note that after the statistics, the price of oil fell. The market, purely and simply, record profits into the parish of severe frosts in the U.S.. The growth of oil and distillate products was the signal for action, though these, in my opinion, went "bovine" character.
First, stocks of distillate products increased only by increasing the stock of diesel fuel at 1.4 million barrels to 73.6 million barrels. The point is that the increase in the production of heating oil in the heating season entails the formulation of excess quantities of diesel fuel, demand for which is
being lowered. Inventories as a key winter product, which is heating oil (fuel oil) for the week ending 14 January, fell to 500,000 barrels to 49.1 million barrels. The resulting volume of oil reserves at 2.1 million barrels, 4.1%, lower than the same period last year.
On the other hand, reduced the supply of oil to U.S. refineries, which amounted to 15.2 million barrels per day, which is 395,000 barrels less than a week earlier. It seems that by reducing oil supplies to refineries increased commercial stocks, as oil imports rose slightly, to an average of 10.1 million barrels per day, compared with 10.0 the previous week. Another "bovine" factor was the decline in manufacturing capacity utilization rate of U.S. refineries, which fell to 91.5% from 94% a week earlier. Production of distillate products has fallen from a record high 4.3 million barrels per day to 4.0 million barrels a day. While the average demand over the past four weeks has been at the level of 4.2 million barrels a day. These "bull" market factors have remembered on Thursday. After a decline in prices of electronic bidding by the end of the day returned to the level of opening, completing the day at $ 47.60 a barrel.All the past week in the northeast U.S. temperatures were below normal levels for this time of year. According to the forecasts of frost is expected and the weather forecaster for the weekend. In such circumstances, traders do not like to open short positions before the weekend, much less keep them on Monday. By reducing the withdrawal could lead only to profit, but it happened from Wednesday to Thursday. As a result, oil prices rebounded on Friday to the maximum of eight. The March futures for oil varieties WTI, traded on NYMEX rose by $ 1.22 to $ 48.53 a barrel - its highest closing since 30 November.
At the IPE in London March "Brent" rose $ 1.41 to $ 45.73 a barrel. By the bovine factor, of course, include disruptions of oil production in the North Sea and Iraq, as well as upcoming events and 30 January. I recall that on the day scheduled meeting of OPEC ministers in Vienna and parliamentary elections in Iraq. According to the statements of U.S. security and Iraq, the activity of the terrorist attacks will be strengthened, not only before January 30, but after the elections. The situation in the Middle East, of course, will contribute to higher prices. As for the meeting OPEC, it is likely that the quota of oil production will not be reduced. Until January 30 the price of crude oil will rise to $ 51.50 a barrel, roughly, but in this case does not make sense to reduce the quota. OPEC can always reduce the production, regardless of official quotas. This decision will further signal to the withdrawal of profits, after reaching this level. But the most interesting thing is that all this is, to date, scratch weather factor. The situation in the northeast U.S. is rather complicated. According to the forecasts of weather forecaster, arctic attack corridor extends from Boston to Philadelphia. The combination of heavy snowfall and cold temperatures will have a strong psychological impact on the market for energy futures. Northeastern U.S. consumes about 80% of heating fuel, and given the expanding corridor of cold weather, high demand for oil will be celebrated almost throughout the North Atlantic states, let alone the Midwest. According to forecasts by 30 January the air temperature in the North-east, on average, will remain at 15-20 degrees Fahrenheit below normal levels for this time of year. Let me remind you that the normal temperature in New York for this time of year is considered to be 25 Fahrenheit (-4 Celsius) and in Boston 21 Fahrenheit (-6 Celsius).
There is another nuance, testifying in favor of higher oil prices. Typically, U.S. refineries in January are for the maintenance for the prevention of work related to the transition of production of gasoline as the main product. Last week, some refineries have reduced production due to the seasonal service - in the future, will be stopped and the rest. All this will reduce the production of heating oil on a background of increased demand. As a result, January 26, EIA statistics show another decline in stocks of fuel oil, and most likely the products of distillation, leading to a new surge in oil prices upwards. In such a situation, one can recommend one - not to sell. Open positions Buy - in order to retain the $ 51.00-$ 51.50 per barrel.
Alexander Fighters
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