The Book Page -- Insulin -- September 25, 2023

Locator: 45578BIGPHARMA. 

Parity: WTI and Brent near parity. Link here. I used to track the spread; haven't done that in a long, long time. Historically, though I no longer know what "historically" means when it comes to oil, WTI sold at a premium to Brent. I forget when that changed but it was so long ago (at least in my mind) that "historical" seems to have less relevancy now except perhaps for the older oil traders.

• a reminder: WTI now part of the Brent blend;
• about $2.35 / bbl to carry WTI to blend with Brent
• knock off the transportation cost, and WTI / Brent almost at parity

A reminder:

The Brent benchmark has seen downward pressure since WTI crude was included on June 1 in the Brent crude basket that underlies the world's most traded benchmark contract. WTI Midland became the first non-European grade included in the basket, highlighting the change that the U.S. shale revolution brought about for the global oil market.

After WTI Midland joined the Brent benchmark, Brent has seen downward pressure because WTI shipments to Europe are much higher than the combined loadings of the other crudes underpinning the North Sea benchmark.

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The Book Club: Insulin

Link here.

Weekly EIA Petroleum Report -- Pay Attention To The Distillate Fuel Numbers -- Mentioned Before -- Becoming More Apparent -- GDPNow -- April 26, 2023

Locator: 44475B. 

Weekly EIA petroleum report: link here. 

• US crude oil in storage dropped by 5.1 million bbls despite almost everything else remaining unchanged in the US economy. N.B. 
• where, repeat, where is all that oil going? [to steal a line from an old Columbo show]
  
• XOM just expanded its huge Beaumont refinery
  
• US crude oil in storage, at 460.9 million bbls -- is still only 1% below the five-year average.
• someone is noticing -- the refiners -- imports are now more than 8% more than same four-week period last year -- that's one takeaway from this report ... think about that ... the economy is "flat" at  best and GDPNow -- today -- suggests a really weakening economy, and yet US refiners are stilll importing lots of crude oil. 
• yes, I know, not all oil is created equally; see RBN Energy today;
  
• and the numbers suggest the refiners are having trouble keeping up. Look at distillate fuel.
• the refiners -- at 91.3% -- solidly over 90% of their operable capacity, and yet ... distillate fuel.
• distillate fuel:
• farming; and,
• US long-haul trucking.
• distillate fuel: decreased by 0.6 million bbls and just that tiny bit of decline resulted in a 12% drop in storage compared to same period last year
  
• farming; and,
• US long-haul trucking.
• propane is doing fine but propane is not needed until the autumn.
• jet fuel product supplied was up 3.3% compared with the same four-week period last year.

After the report, WTI dropped another 1.25%.

Bottom line: oil traders betting on a recession.

June 23, 2023: WTIBrent.

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GDP Now

Not good. Huge drop.

Link here.