This simply blows me away, on so many levels.
Weekly EIA petroleum data:
- the time line:
- Texas Freeze; power lost: February 15, 2021
- power back on: February 19, 2021
- commerce back to normal: February 22, 2021
- US crude oil in storage increased by 21.6 million bbls from the previous week;
- US crude oil in storage now stands at 484.6 million bbls, only 3% above the five year average for this time of year
- refineries were operating at 56.0% of their operable capacity last week (week ending February 26, 2021)
From February 17, 2021, right during the height of the Texas Freeze:
Today, over at CNN Business: what does Warren Buffett see in Chevron? The lede:
Many investors are increasingly hesitant to hold shares of oil and gas companies as a global energy transition gathers steam.Not Warren Buffett.What's happening: Buffett's Berkshire Hathaway just disclosed a new stake in Chevron (CVX), the second largest oil firm in the United States.The $4.1 billion investment could have been spearheaded by Berkshire investment managers Ted Weschler and Todd Combs. But Buffett still runs the show, and it's a sign that the world's most famous investor sees long-term value in a sector that's taking plenty of heat.Chevron shares plunged to their lowest level since 2006 when the pandemic destroyed oil prices last March, and they've failed to fully recover. The company posted a net loss of $5.5 billion for 2020, and its stock is now trading at $93.13, 15% lower than one year ago.
https://twitter.com/energy_tidbits/status/1367071910543073282?s=21
ReplyDeleteMore and more, it seems to me, the price of oil has nothing to do with the actual supply or demand, but rather with "jaw-boning," headlines, the strength/weakness of the dollar, interest rates, inflation outlook, and traders in the oil market who have learned how to manipulate the narrative.
DeleteIn one week, with regard to oil in storage, we went from "right at the five-year average" to "3% over the five-year average" -- a record build -- 20+ million bbls -- and the price of oil? Jumps. And nothing else changed.
DeleteI'm not surprised by the EIA report. Refineries are not restarted by flipping a switch, likely they were able to use this down time to do some maintenance, plus after a freeze, any water line need to be checked for leaks. Furthermore the crack spread had been low since COVED started last year.
DeleteLooking at the EIA report withdraws from product and crude stocks show a net 2mm barrel decrease.
I see an increase of imports last week, this data is noisy on a weekly basis. Imports show north of 16mm barrels last week. (EIA line 33)
With the OPEC meeting, makes no sense to flood the markets and drop the price. Pump and sell 10% more crude, could see a drop of 20% crude price. USA oil output is down by close to 3mm a day compared to last year, with many bankruptcies, bank aren't loaning $$$s to the drillers. Rig count is down worldwide. No quick recovery of 13mm bbl per day
Just my opinion.... That and 5 bucks will get you a coffee at Starbucks.
Just a couple of months ago or so, "they" were talking about Cushing filling up again. I find it interesting that with a build of 20+ million bbls there was no talk about lack of storage. I was not aware of any declarations of "force majeure" from those unable to take their contracted crude oil.
DeleteWho knows where the inventory is stored? I'm guessing that its likely on ships in transit. Only the accountants know.
ReplyDeleteThe 20+ million in US storage was not in ships in transit. This is oil stored at Cushing, etc. It's fascinating that no mention has been made where they actually found this much storage literally overnight. Remember when WTI went negative last year -- there was no physical storage available.
DeleteI think it "soared" based on mild war jitters in the ME.
ReplyDeleteAnd I'm not sure a couple bucks is "soaring". I'd say went up moderately. It's less than a 5% change. Like if your eggwhites went from $2.99 to $3.25, would that be "soaring". It's just a little under a 10% change.
Agree. Oilprice.com tends to use such adjectives a bit too often. Clickbait.
ReplyDelete