Canadian crude prices plummet and Cushing, Okla., is getting sucked dry! This comes as crude oil speculators amass their biggest short position in five years!
Midwest drivers get a major price shock as gas prices skyrocket, jumping 30 cents to 90 cents per gallon depending on what station you were looking at, driving the national average up by 3 cents overnight! The main reason was a report that the largest crude distillation unit at BP's 413,500-barrel-per-day in Whiting, Ind., is suffering more problems and will require at least one month to repair.
Leaky pipes at this unit have been a problem since it was installed a few years ago and is raising concerns of not only the repairs but being able to do them safely. Bloomberg news reported BP's Indiana refinery cut rates as it searches for the source of leaks, forcing the shutdown of biggest crude unit for at least one month to repair the refinery.
If that wasn't enough, bad news for Canadian oil producers, a leaking Enbridge Pipeline is backing up Canadian crude. Enbridge, according to Bloomberg, says that it expects to restart the Flanagan South on Thursday after it was shut following a leak in Shelby County, Miss.
Crude also fell for a third week in a row reflecting strong U.S demand. The International Energy Agency (EIA) reported that U.S. crude oil refinery inputs averaged over 17.0 million barrels per day during the week ending Aug. 7, 2015, which is 46,000 barrels per day less than the previous week's average. Refineries operated at 96.1% of their operable capacity last week. Gasoline production increased slightly last week, averaging 10.0 million barrels per day. Distillate fuel production increased last week, averaging over 5.1 million barrels per day.
U.S. crude oil imports averaged about 7.6 million barrels per day last week, up by 393,000 barrels per day from the previous week. During the last four weeks, crude oil imports averaged about 7.6 million barrels per day, 1.1% below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 683,000 barrels per day. Distillate fuel imports averaged 118,000 barrels per day last week. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 1.7 million barrels from the previous week. At 453.6 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years. Total motor gasoline inventories decreased by 1.3 million barrels last week, but are in the middle of the average range. Both finished gasoline inventories and blending components inventories decreased last week. Distillate fuel inventories increased by 3.0 million barrels last week and are in the middle of the average range for this time of year. Propane/propylene inventories rose 2.4 million barrels last week and are well above the upper limit of the average range. Total commercial petroleum inventories increased by 5.6 million barrels last week.
Total products supplied during the last four-week period averaged 20.4 million barrels per day, up by 3.2% from the same period last year. During the last four weeks, motor gasoline product supplied averaged over 9.6 million barrels per day, up by 6.6% from the same period last year. Distillate fuel product supplied averaged more than 3.7 million barrels per day during the last four weeks, down by 5.4% from the same period last year. Jet fuel product supplied is up 0.2% compared to the same four-week period last year.
Gold demand fell hard! Vital buyers in Asia lost their appetite for the metal, according to the World Gold Council. Of course, that could change after the China delegation. Demand for the precious metal weighed in at 914.9 tons between March and June of this year, down from 1,038 tons during the same period in 2014, according to the industry body's latest Gold Demand Trends report.
"This has actually been a challenging quarter; you've [the] evidence in the data," said Alistair Hewitt, head of market intelligence at the London-based World Gold Council. The decline came as global demand for jewelry fell by 14% in the second quarter to 513.5 tons, compared with 594.5 tons the year before. Jewelry makes up about 60% of global gold consumption.
A rise in equity purchases and expectations of a rate increase by the Federal Reserve sapped global demand for gold, an asset that doesn't pay interest and struggles to compete with other assets that offer a return and are deemed safe, like U.S. Treasury bonds.