US Crude Oil Inventories Dropped 7 Million Bbls -- January 18, 2018

US crude oil inventory drawdown, EAI data: link here: 6.9 million bbls. Holy mackerel!

Diesel fuel: the relationship between diesel and the rally in crude oil. The WSJ article helps connect a few dots.

BP: returns to northern Iraq now that the country is free of Islamic State -- WSJ. It was reported that Shell has exited crude oil opportunities in Iraq (and, all of the Mideast, I believe).


Venezuela: oil production is collapsing - WSJ.

Production fell 216,000 barrels a day to 1.6 million in December compared to November, the 15th consecutive monthly decline, according to data released Thursday by the Organization of the Petroleum Exporting Countries.

Venezuela’s decline in output accelerated rapidly in the last quarter of the year. During 2017 as a whole, it fell 649,000 barrels a day, a decline of 29%.

The question is whether this will help prop up the price of oil. My hunch: Saudi Arabia and Russia, itching to raise their own oil output, will tell us that they are concerned about adequate global oil supplies with the collapse of Venezuela. To prevent $5.00-gasoline in the US, Saudi Arabia and Russia will increase their oil production.

In fact, for the US the loss of oil from Venezuela has been relatively "minimal" and would easily be made up by Canadian heavy oil (US shale oil cannot replace Venezuela heavy oil). The amount of oil imported from Venezuela has dropped about 500,000 bopd since 2010. That's a huge percentage for Venezuela (about a 50% drop) but for the US it barely moves the needle. In fact, I don't think it moves the needle at all.

By the way, this headline over at ZeroHedge: OPEC oil production rose in December despite plunge in Venezuelan output.

Healthcare: Trump to let health practitioners opt out of performing procedures on religious grounds -- WSJ.