Back between 1990 and 2002 WTI prices were stuck between $10 and $20 a barrel.
On a percentage basis, we’re back in that same grey area. Over the past two years we’ve traded mainly between $92 and $104. We’ve seen above and below on slippage, but it’s just not as exciting any more.
I think this is how LiLo must feel since she’s been sober. And like LiLo can attest, when you’re not volatile and making headlines every day, nobody wants to pay attention to you. We’ve seen Banks get forced out at the beginning of the year because of Dodd Frank, but now we’re see-ing funds pulling out of the game. CALPERS has decided to pull money from the hedge fund space and that’s taking a chunk out of the commodity game.
Now we’re seeing a leading fund run by the Rockefellers to get out of the oil space. Yes, all of these are in different areas of oil and gas, but they are all leading by an example.
CRUDE -1.5M – Let’s not try to pretend like all of those imports we saw last week are here to stay. We’re getting pretty comfortable with domestic production filling our refinery bellies. That means we’re going to keep pushing out imports from everywhere but Mexico and Canada. Which of course we’re going to again see refineries running above 16M b/d. So much for MOAT (Mother Of All Turnarounds) oversupplying our system.
GASOLINE -1.0M - We can get used to these fall season draws because the more people that are going back to work…oh forget that. Let’s take note of the fact that refining margins are so bad everywhere but here we’re never going to get any help from Europe again. Now that refiners are pushing the yield to distillate, we’re even missing out on a chance to make money on exports.
DISTILLATE +1.25M – Yeah, another build of disty! We’re going to have to push margins under $10 before everyone figures out we really need a push higher in demand to justify all of this production. See, unlike gasoline, we aren’t finding a lot of places to keep ramping up our exports that are already at a record 1.2M b/d..
UTILIZATION -0.5% - To all of the haters that were thinking we’d be running under 90% by now, there’s still another week before you are really, really wrong.
CUSHING -1.0M – At this point it doesn’t matter how much we’re drawing outside the fact that we’re just drawing period. I do believe that Seaway Twin was supposed to be up and running by Christmas.