Gas Stocks Are Down and Distillates Are Up
July 10, 2019
The API reported after the close of the markets that crude stocks declined by a big 8.1 million barrels. Reuters is calling for a 3.1 million barrel decline for today’s DOE inventory report. Crude stocks at Cushing, Oklahoma the NYMEX WTI crude oil futures contract delivery point were down 754,000 barrels. The API reported that gasoline stocks were down 257,000 and for today’s report Reuters is calling for a decline of 1.3 million barrels. Distillate stocks were up 3.7 million barrels in the API’s report and the outlook for today is that gas stocks will be up 739,000 barrels.
The estimates for today’s DOE report from the Bloomberg survey are calling for crude stocks to be down 1.532 million barrels, gasoline stocks down 2.020 million barrels and distillates up 639,000 barrels.
The EIA in their monthly Short Term Energy Outlook (STEO) report stated that US crude oil production would rise to a record 12.354 million bpd for 2019. This is a 35,587 bpd rise from their June 2019 forecast. EIA also forecasted a change in world petroleum consumption of -138,023 and a change in world petroleum supplies of +264,480 from last month’s report.
EIA raised their WTI crude oil price forecast in the STEO by +$0.26 up to $59.49 for 2019 and lowered their Brent crude oil price forecast by -$0.19 down to $66.44 for 2019.
The Foreign Ministers of Germany, France, Britain and the European Union said that they were concerned about Iran increasing its uranium enrichment. European powers accused Iran of “pursuing activities inconsistent with its commitments” and called for an urgent meeting of the parties to the agreement to discuss Iran’s compliance.
Israel’s Prime Minister, Benjamin Netanyahu, cautioned Iran that it is within range of Israel air strikes, citing what he described as Iranian threat to destroy Israel. Last week, a senior Iranian parliamentarian was quoted by the semi-official Mehr news agency as saying that if the US attacked Iran, Israel would be destroyed in half an hour.
According to a Platt’s survey, OPEC produced a total of 30.09 million bpd in June, unchanged on the month. The 11-OPEC members bound by output quotes remain over-compliant with their committed cuts, but only by 40,000 bpd for a compliance rate of 104.6%, down from May’s 117%. Saudi Arabia’s oil production increased by 150,000bpd in June to 9.85 million bpd. Iran’s oil production fell by 100,000 bpd to 2.35 million bpd, the lowest level since September 1988.
The New York Fed’s yield-curve model implies a probability of 33% the US economy will be in recession in June 2020. The twelve-month forward recession risk is at its highest since April 2008.