The Surge In US Crude Oil Inventories Largely Due To Build On West Coast --Thursday, May 3, 2018

OSP:

• Saudi Arabia needs more cash
• Saudi Arabia needs (at least) $88-oil
• "unexpectedly raises Arab light oil price to Asia" -- reported by oilprice.com in early April,
• now, this, Platts -- Saudi Aramco raises all June Asis-bound crude oil OSPs by about a buck

IPO: something "no one" has thought about -- but it's a fact, Jack -- the Saudi stock exchange cannot handle listing the Saudi Aramco IPO. No matter what they say. That doesn't mean "they" won't do it, but it will be disaster.

Re-balancing: for fifty (50) weeks I tracked "re-balancing." Then about three weeks ago, week 50, I stopped. Perhaps global supplies have re-balanced -- but certainly we're not seeing that in the US. From the EIA yesterday: US crude stockpiles surge to highest level this year. And the big surge in Permian production is yet to begin. But look at the gasoline numbers (and yet the price of gasoline continues to rise [can you spell "manipulation"?]) -

U.S. crude oil stocks rose sharply last week, bringing overall supply to its highest level since December, and gasoline inventories also rose, the Energy Information Administration said on Wednesday.

Crude inventories jumped by 6.2 million barrels to about 436 million barrels in the week to April 27, compared with expectations for an increase of 739,000 barrels. The build was largely concentrated on the West Coast, where inventories rose by nearly 5 million barrels. [And, of course, no analysis provided: why was the surge largely concentrated on the West Coast? Are California refineries cutting back operations?]

“Sometimes the West Coast numbers are erratic and usually when you get a big build in the West Coast, it’s followed with a big draw the next week," said Phil Flynn, analyst at Price Futures Group in Chicago.

Gasoline stocks rose 1.2 million barrels, compared with analysts' expectations in a Reuters poll for a 587,000-barrel drop.

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Back to the Bakken Where Fracking Is Always In Fashion

Active rigs:

$67.90→	5/3/2018	05/03/2017	05/03/2016	05/03/2015	05/03/2014
Active Rigs	60	50	27	86	185

RBN Energy: the US gas market braces for a storage surge.

The U.S. gas market in April — the first month of the official storage injection season — was anything but typical. Production was at record highs, nearly 8.0 Bcf/d higher than last year.

At the same time, weather in April was exceptionally cold, which meant storage activity remained in withdrawal mode on a net U.S. basis through the first three weeks of the month — a first for the April gas market going back at least eight years. That anomaly, in turn, led to an expanding deficit in storage compared to previous years, deferring the inevitable — shoulder season weather and supply surpluses — for another month.

But now, in May, with the cold-weather effects on gas demand fading and record production levels here to stay, the market is bracing for a storage tsunami. The question is, will it be enough to erase the massive inventory deficit compared to recent years? Today, we update our analysis of the gas market balance and implications for the 2018 injection season.