Refinery Workers Strike in France
December 30, 2019
The inventory reports were delayed until Friday of last week due to the holidays. Propane stocks were down 2.562 million barrels putting total stock at 88.398 million barrels. The expectation was for a decline of 1.4 million barrels so a bigger draw but still not overall concerning about low supplies. The Midwest stocks were down 63,000 barrels putting total Midwest stocks at 20.411 million barrels compared with 21.263 million barrels last year a deficit of 852,000 barrels. The Gulf Coast stocks were down 2.104 million barrels putting total Gulf stocks at 58.144 million barrels compared to last year at this time of 41.466 million barrels, a 16.678 million additional barrels. Over all total stocks are in great shape. The Midwest is a bit low but with very mild temperature not a lot of worry currently. Production was strong at 2.383 million bpd down 22,000 bpd. Propane exports were down 196,000 bpd to a total of 1.033 million bpd. So, with production at 2.383 and exports at 1.033 no threat of stocks getting used up to fast unless exports and or demand ramp up.
The DOE report called crude stocks down 5.47 million barrels which was more than the 1.7 estimates. Gasoline stocks were up 1.96 more than most expectations and distillates were down 152,000 barrels down slightly when a slight build was expected.
The energy markets opened higher overnight as the US conducted air strikes in Iraqi. News reports indicated this was in response to the killing of a US civilian contractor in a rocket attack on an Iraqi military base. Iraqi has said this action will draw a strong response. Iraqi’s allies are also condemning the attacks.
This is another shortened trading week with the holiday right in the middle of the week on Wednesday. This should limit traders at their desk and could allow for some additional volatility.
The Baker Hughes rig count showed that rigs looking for oil were down 8 to a total of 677 rigs.
There is a refinery workers strike in France and it has started to cause a few issues. S&P Platt’s reported that , “Shortages of oil products have started mounting as staff at several French refineries continue strike action, resulting in increased imports of diesel and Gasoil. “There are shortages of products in France,” a diesel trader said.
Optimism on the China and US trade front, OPEC+ production cuts, and a bullish inventory report on Friday continue to support and offer more upside to the energy markets. The only negatives from Friday were traders taking some profits and the comments made by Russian Energy Minister, Alexander Novak. He said that OPEC+ may need to end prosecution cuts in 2020.