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2nd half of March this was a money maker. Hope it continues in April.
The Energy Report
Phil Flynn
http://www.pricegroup.com/
pflynn@pricegroup.com
The Energy Report May 29th, 2020
Fly in the Ointment
Demand is rising, and production is falling, but China might be the fly in the oil market ointment. The Energy Information Administration report (EIA)t was a feel-good story about the resilience of American people and the American economy and the road back as oil and gas demand were on the rise, and that gave a boost to petroleum prices.
Oil prices are giving back their demand growth inspired gains as it is concerned about rising tensions between the U.S. and China. President Trump is going to have a press conference about China's new security law for Hong Kong, and oil traders are concerned that this could lead to another US-China trade war and kill oil demand. That demand has shown signs of coming back much more energetic and faster than most people had expected in China and the U.S. as well. A big jump in U.S. oil refinery runs, and a leap in U.S. gasoline demand had oil traders driving prices to post-coronavirus highs.
Demand increases are coming as U.S. production continues to plunge and report overnight that OPEC oil production has crashed by 6.3 million barrels per day to 23.75 million barrels per day in May, according to JBC data. All of this would suggest that the world is going to see the global oil oversupply start to disappear as long as we don't take a big step back with another trade war.
The EIA numbers were encouraging. While the overall commercial crude oil inventories increased by 7.9 million barrels from the previous week, we saw a big 3.395 million-barrel draw at the Cushing, Oklahoma delivery point. We also saw a 3.96 million barrels drop in the Midwest crude oil supply. The reason for the build was a 10.249 million barrel build on the Gulf Coast. We also saw 2.11 million barrels of oil go into the Strategic Petroleum Reserve at 534.4 million barrels. Crude oil inventories are about 13% above the five-year average for this time of year.
Yet refinery runs and gasoline demand were on the rise, and that shows that as the U.S. starts to open up its economy, demand for oil will spike. We saw gasoline demand snapback to 7.253 million barrels a day. Total motor gasoline inventories decreased by 0.7 million barrels last week and are about 10% above the five-year average for this time of year.
Refinery runs also came in stronger. The EIA reported U.S. crude oil refinery inputs averaged 13.0 million barrels per day during the week ending May 22, 2020, which was 87,000 barrels per day more than the previous week's average. Refineries operated at 71.3% of their operable capacity last week. Gasoline production increased last week, averaging 7.2 million barrels per day. Distillate fuel production decreased last week, averaging 4.8 million barrels per day.
The EIA also reported that distillate fuel inventories increased by 5.5 million barrels last week and are about 24% above the five year average for this time of year. Propane/propylene inventories increased by 1.5 million barrels last week and are about 13% above the five year average for this time of year. Total commercial petroleum inventories increased last week by 14.9 million barrels a new record.
Still, while demand is coming back, we have a long way to go to get back to one year-ago levels. The EIA reported that, "Demand based on products supplied over the last four-week period averaged 16.2 million barrels a day, down by 20.1% from the same period the previous year. Over the past four weeks, motor gasoline product supplied averaged 7.0 million barrels a day, down by 25.7% from the same period last year. Distillate fuel product supplied averaged 3.5 million barrels a day more than the past four weeks, down by 13.6% from the same period the previous year. Jet fuel product provided was down 66.6% compared with the same four-week period."
Natural gas is getting weighed down by significant supply. The EIA reported that working gas in storage was 2,612 Bcf as of Friday, May 22, 2020, according to EIA estimates. This represents a net increase of 109 Bcf from the previous week. Stocks were 778 Bcf higher than last year at this time and 423 Bcf above the five-year average of 2,189 Bcf. At 2,612 Bcf, the total working gas is within the five-year historical range.
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Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. PFGBEST, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.
Phil is one of the world's leading energy market analysts, providing individual investors, professional traders and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline and energy markets. Phil's market commentary, fundamental and technical analysis, and long-term forecasts are sought by industry executives, investors and media worldwide.
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Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Alaron Trading Corp. its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.
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US gasoline demand falls by 8.2pc: EIA
20 May 2020
US implied fuel demand tumbled last week and fuel stockpiles rose as refiners navigate a rocky return to fuel consumption.
Implied gasoline demand fell by 8.2pc to 6.8mn b/d in the week ended 15 May, according to the Energy Information Administration (EIA). Consumption sank to 28pc lower than year-ago levels and 25pc below the five-year average for the week, even as more states loosened travel and business restrictions imposed to limit the spread of the Covid-19 pandemic.
Implied diesel demand fell by 3.9pc to 3.7mn b/d, 3.1pc lower than the same week last year.
Weekly EIA data offers only volatile estimates of consumption, and will be revised weeks from now to more exact monthly data. But the snapshot could temper optimism earlier this month of recovering fuel demand heading into the traditional US driving season.
US gasoline inventories increased by 1.1pc to 255.7mn bl, their highest level since the beginning of May and largest weekly rise in about a month. The US Gulf coast led the build with a 2.2pc increase to 90.3mn bl, the largest stockpile volume there since mid-February. Inventories were 8.5pc higher than the five-year average for the week, and 14pc higher for conventional gasoline blendstock stockpiles, which increased by 4.4pc to 38.5mn bl. Gasoline inventories increased by some volume in every region but the Rockies, where inventories fell by 2.8pc to 7.8mn bl.
Estimated US gasoline exports increased from the previous week by 40pc to 244,000 b/d, still 41pc lower than the same week last year. Gasoline imports increased by 8.2pc to 526,000 b/d, mostly to the Atlantic coast.
US diesel stockpiles increased by 2.5pc to 158.8mn bl, their highest volume since early March 2017. Ultra-low sulphur diesel in storage increased by 2.8pc to 145.9mn bl, the highest volume since February 2017. Estimated weekly diesel exports increased by 19pc from the previous week to 911,000 b/d, 35pc lower than the same week last year.
Atlantic coast diesel inventories reported the largest build of any region. ULSD increased by 4.3pc to 49.6mn bl, the highest volume since March 2017 and 31pc larger than the five-year average for the week. West coast ULSD stockpiles were effectively flat, at 12.7mn bl.
By Elliott Blackburn
https://www.argusmedia.com/en/news/2107060-us-gasoline-demand-falls-by-82pc-eia
Thanks. The trend is up, the MB is quiet means it’s just warm up :)
Signs of a rebound in gasoline demand hint at higher oil prices
Published: May 14, 2020 at 3:18 p.m. ET
By Myra P. Saefong
April U.S. motor gasoline deliveries fell 31.1% month on month: AP
Gasoline demand in April suffered its worst month on record, but signs of rebound in consumption as some U.S. states emerge from COVID-19 related lockdowns may offer an indication for higher oil prices ahead.
The faster gasoline ‘sees demand improvement, the faster the underlying barrel of oil will rally.’
— Patrick De Haan, GasBuddy
“The largest portion of a barrel of oil is refined into gasoline here in the U.S.,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “The faster that portion of the refined barrel sees demand improvement, the faster the underlying barrel of oil will rally.”
April U.S. motor gasoline deliveries, a demand indicator, fell by 31.1% month on month, the largest monthly decrease on record, according to a report Thursday from the American Petroleum Institute. Demand for the month was at 5.7 million barrels a day, the lowest demand for any month since January 1972.
However, as some states have re-opened non-essential businesses, fuel-price tracker GasBuddy pointed out that demand in the last week of April rebounded by 22% from the lowest overall week of gasoline demand on April 5 to April 11.
“There was a lot of ugliness in the downstream petroleum sector, but there’s just a few ounces of sunlight now starting to come into the picture for select segments, like gasoline,” De Haan told MarketWatch.
The “ultra-low prices” for gasoline “appear to be behind us,” he said. The national average remains well below a year ago at just over $1 a gallon, and De Haan said he expects “the gap will narrow slightly” this summer, perhaps down 50 cents to 75 cents a gallon from year-ago levels. “That means there’s potential for further price increases.”
https://www.marketwatch.com/story/signs-of-a-rebound-in-gasoline-demand-hint-at-higher-oil-prices-2020-05-14
as long as it keeps moving NORTH ( quietly), No complain here :)
Not many playing it. It ran 10% today on only 350k shares traded.
This MB is quiet. Compare to stock market in general, UGA has better potential potential. IMO
I am swing trading it. Took me a while to get used to it. It’s tricky, but it’s fun. It can certainly get away from ya, but then trying to catch the next wave is half the fun. GT’s
I got a nice fill near the bottom, but acted too late to get topped off. Have a GTC order still in but will never fill---missed that chance.
This is the little engine that could - might need to stop for water and firewood though
Tomorrow should be interesting - 15 to 17 range might take some doing.
Wow, a 421k block @ 12.11 just hit. That’s $5million!
Must be the perfect time to short.
I just went long.
Gas prices are exploding due to refinery crisis, this may be a good buy for a few weeks
Looks like it's due to explode.
Just blasted through the 20 dam MA.
This is due to contango.
UGA's Objective
The investment objective of UGA is for the changes in percentage terms of the unit's net asset value to reflect the changes in percentage terms of the price of gasoline, as measured by the changes in the price of the futures contract on unleaded gasoline delivered to the New York harbor traded on the New York Mercantile Exchange that is the near month contract to expire, except when the near month contract is within two weeks of expiration, in which case it will be measured by the futures contract that is the next month contract to expire, less UGA's expenses.
How can UGA be down today when the Gasoline RBOB future were up? I thought this ETF trades off the Gasilne RBOB futures, can someone explain? Not making sense....
2010 Margins for Gasoline
http://energyalmanac.ca.gov/gasoline/margins/index.html
All over USA TODAY that gasoline may continue to drop... I guess that means it's time to buy.
Hey Frenchee...I found you..I am at Chevron Now...hoep all is well.
I have several very nice oil and gas plays..
Take it easy.
Go figure--UGA up while oil's down...
Looks like gas is starting to climb again giff...
New confirmation of UGA trend change is 23.07.
Heads up folks...intermediate-term down trend line on the verge of being taken out to the upside. See daily chart in iBox. If 24.51 is taken out, trend change will be confirmed to up.
Hi giff,
Oil has declined nearly 66% from its peak closing price of $145.29 on July 3rd to its closing low of $49.62 on November 20th. With gas prices down significantly since then, drivers no longer dread filling up at the pumps like they did just a couple of months ago.
I recently came across a good article highlighting a simple way to lock in low gas prices. The US Gasoline Fund (UGA) is an ETF that tracks the price of gasoline futures in the US. If you want to go to the pump and not even care what gas prices are, you can buy the same dollar amount of UGA that you would normally spend on gas each year based on the current price of gas. If gas prices go up and you're paying more at the pump, your UGA will also be going up by a similar amount. If gas prices go down, your UGA will also go down, but you'll be paying less at the pump as well.
Seems like a good hedge...