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Petróleo Brasileiro S.A. - Petrobra Message Board

petroglyph56 15 posts  |  Last Activity: Mar 4, 2015 11:02 AM Member since: Apr 18, 2005
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  • Reply to

    Inventories and Consumption

    by petroglyph56 Feb 19, 2015 11:25 AM
    petroglyph56 petroglyph56 Mar 4, 2015 11:02 AM Flag

    Not surprisingly, another huge crude build. Demand remains strong, especially distillates due to the winter from hell in the northeast. Gas is the big one to watch, and it's demand growth continues to exceed economic growth by a healthy margin.

    cut from the EIA
    "U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 10.3 million barrels from the previous week. At 444.4 million barrels, U.S. crude oil inventories are at the highest level for this time of year in at least the last 80 years. Total motor gasoline inventories remained unchanged last week, and are well above the upper limit of the average range. Finished gasoline inventories increased while blending components inventories decreased last week. Distillate fuel inventories decreased by 1.7 million barrels last week and are in the lower half of the average range for this time of year. Propane/propylene inventories fell 4.2 million barrels last week but are well above the upper limit of the average range. Total commercial petroleum inventories increased by 2.3 million barrels last week.

    Total products supplied over the last four-week period averaged about 19.9 million barrels per day, up by 7.7% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged about 8.7 million barrels per day, up by 4.0% from the same period last year. Distillate fuel product supplied averaged over 4.2 million barrels per day over the last four weeks, up by 16.8% from the same period last year. Jet fuel product supplied is up 12.9% compared to the same four-week period last year."

  • Reply to

    Inventories and Consumption

    by petroglyph56 Feb 19, 2015 11:25 AM
    petroglyph56 petroglyph56 Feb 25, 2015 10:51 AM Flag

    This week's EIA, same trends...

    U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 8.4 million barrels from the previous week. At 434.1 million barrels, U.S. crude oil inventories are at the highest level for this time of year in at least the last 80 years. Total motor gasoline inventories decreased by 3.1 million barrels last week, but are above the upper limit of the average range. Finished gasoline inventories increased while blending components inventories decreased last week. Distillate fuel inventories decreased by 2.7 million barrels last week and are in the lower half of the average range for this time of year. Propane/propylene inventories fell 2.2 million barrels last week but are well above the upper limit of the average range. Total commercial petroleum inventories increased by 2.5 million barrels last week.

    Total products supplied over the last four-week period averaged over 19.6 million barrels per day, up by 5.1% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged over 8.6 million barrels per day, up by 3.3% from the same period last year. Distillate fuel product supplied averaged over 4.1 million barrels per day over the last four weeks, up by 11.2% from the same period last year. Jet fuel product supplied is up 7.5% compared to the same four-week period last year.

  • Reply to

    Inventories and Consumption

    by petroglyph56 Feb 19, 2015 11:25 AM
    petroglyph56 petroglyph56 Feb 24, 2015 11:36 PM Flag

    This from a Reuter's piece filed from Houston on Feb 23rd

    " Magnum Hunter Resources Corp has halted all drilling and told services firms it will not resume work unless its costs fall 40 percent, the company's Chief Executive Gary Evans told a conference in Houston.

    Such pullback, combined with shale well decline rates of some 60 percent or more a year, has Evans predicting U.S. production will begin falling "in the next two months."

    His view is largely echoed by several other executives, though they say their own output will hold up or rise and expect much of the decline come from the shuttering of older, low-yielding wells known as strippers.

    Assuming that many drilling contracts will be carried out, the U.S. Energy Information Administration (EIA) still sees output climbing early this year to peak at 9.42 million barrels per day in May, with a decline starting in June.

    After nearly doubling since 2008, U.S. crude production should stabilize, though not necessarily decline, in the second half of this year, analysts at IHS said." end quote...

    So..... at least a couple of more months of smash mouth poundings as the EIA reports ever higher inventories and US oil production still growing.

    Then sometime in the spring to summer maybe the supply growth flattens out. I would guess we'll see some rough and tumble in the oil pits until that happens, both up and down.

  • Reply to

    Inventories and Consumption

    by petroglyph56 Feb 19, 2015 11:25 AM
    petroglyph56 petroglyph56 Feb 19, 2015 4:00 PM Flag

    Yeah, that's a little bit of hyperbole that they seem to be kind of hung up on, repeating it week after week. Ok, the storage is high, we get it.

    What really matters is the world's supply/demand balance, or rather, imbalance. Fifty dollar oil means that drilling budgets will keep getting tightened till the balance comes back into line.

    That will happen. The $64,000 question is how quickly and at what new equilibrium level.

  • petroglyph56 by petroglyph56 Feb 19, 2015 11:25 AM Flag

    "U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 7.7 million barrels from the previous week. At 425.6 million barrels, U.S. crude oil inventories are at the highest level for this time of year in at least the last 80 years. Total motor gasoline inventories increased by 0.5 million barrels last week, and are above the upper limit of the average range. Finished gasoline inventories decreased while blending components inventories increased last week. Distillate fuel inventories decreased by 3.8 million barrels last week and are in the lower half of the average range for this time of year. Propane/propylene inventories fell 3.5 million barrels last week but are well above the upper limit of the average range. Total commercial petroleum inventories decreased by 0.8 million barrels last week."

    Total products supplied over the last four-week period averaged 19.8 million barrels per day, up by 3.6% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged over 8.6 million barrels per day, up by 3.5% from the same period last year. Distillate fuel product supplied averaged 4.2 million barrels per day over the last four weeks, up by 6.6% from the same period last year. Jet fuel product supplied is up 4.1% compared to the same four-week period last year."

    That's a cut-n-paste from the EIA today. Crude stocks up huge, but offset by product inventory draws, which matters. Despite speculation about the weather's impact, product use continues higher YoY.

  • Reply to

    Looking for Clues in the MLPs

    by petroglyph56 Jan 26, 2015 3:21 PM
    petroglyph56 petroglyph56 Feb 4, 2015 2:34 PM Flag

    Well, the EIA inventory numbers are battering crude today, no big surprise there. That will stay bad for a while, barring something really unusual.

    But once again in the fine print, demand is up, the numbers jump around a bit, but the trend continues:

    "Over the last four weeks, motor gasoline product supplied averaged 8.8 million barrels per day, up by 6.3% from the same period last year. Distillate fuel product supplied averaged 4.2 million barrels per day over the last four weeks, up by 4.7% from the same period last year. Jet fuel product supplied is up 4.5% compared to the same four-week period last year."

    This bottoming process is going to be rocky for a while yet. But the trends are in place. Supply is just a supertanker with a lot of momentum, it will take many months to stop growing and start shrinking.

    In the "better lucky than smart" vein, I sold a bunch of Feb6 17.50 calls last week. Yesterday that looked stupid, as I was poised to leave 10k on the table, today it's not so stupid, offsetting the pain otherwise.

  • Reply to

    Looking for Clues in the MLPs

    by petroglyph56 Jan 26, 2015 3:21 PM
    petroglyph56 petroglyph56 Jan 30, 2015 3:18 PM Flag

    Not utterly surprising to see so see a big short-covering rally in oil today.

    Here's a media take, and I think a good one: ""Some "short covering was expected and the rig count number sparked the rally late," said Phil Flynn, analyst at Price Futures Group in Chicago.""

    I wish it meant the corner had turned, but that's not clear yet. It does mean that the shooting-fish-in-a-barrel short trade on oil and oil services has gotten to be an old, crowded trade. And some of those shorts are eying the exit. Or even trying to wedge through it, like today in the oil futures, up some 8%

  • Reply to

    Looking for Clues in the MLPs

    by petroglyph56 Jan 26, 2015 3:21 PM
    petroglyph56 petroglyph56 Jan 28, 2015 11:17 AM Flag

    In light of the overwhelming clamor for more clues to the direction for oil prices over the mid term, here's a note from today's EIA petroleum report:

    "Over the last four weeks, motor gasoline product supplied averaged 8.9 million barrels per day, up by 8.0% from the same period last year. Distillate fuel product supplied averaged 4.0 million barrels per day over the last four weeks, up by 5.6% from the same period last year. Jet fuel product supplied is up 7.8% compared to the same four-week period last year."

    That's a view into the US demand response to sharply cheaper gas.

    Yes, the market is still glutted with lots of oil, yes inventories are high - it will take a while for supply to kink downwards. But, in the shadows where there is less media focus, it appears that demand is up pretty noticeably. Eventually the S curve and the D curve will intersect.

  • petroglyph56 by petroglyph56 Jan 26, 2015 3:21 PM Flag

    I'm not so interested in the dividend discussion, it's got some importance, sure, but I think the future price of oil is what needs to be in focus. How much does it recover, how soon?

    I think one of the places to watch for bottoming is the MLPs, more specifically the upstream partnerships, the ones actually selling oil and gas. As you'd expect, they have gotten totally crushed, falling over 50%. But in the past two days, names like LGCY and VNR have had wild rallies. Both up 11-12% today alone. Possibly short covering, given the sharpness of the bounce. But that's a clue too. Some set of shorts and/or longs thinks things are changing. I'm not calling a bottom, just accumulating clues

    That's it, my clue for the day. Take it back to the regularly scheduled programming.

  • Reply to

    NE 2015 Financials

    by endeend88 Jan 15, 2015 4:50 PM
    petroglyph56 petroglyph56 Jan 15, 2015 6:08 PM Flag

    I'm curious why and how you figure what rig demand would be if oil stayed at $40 for anything beyond the mid term. Since the drillers have to take whatever projects the E&Ps green light, it's not really in the drillers hands, although they can slash pricing and pursue what little work will be bid at those levels.

    Are you looking at specific fields such as the North Sea and the Brazilian sub-salt? I mention those 2 because my impression has been that there would be a ruinous decline in rig demand for those 2 areas, in particular, with long term low prices.

    Things will be ugly for the drillers if oil stays that low for any length of time, IMO.

  • petroglyph56 petroglyph56 Jan 14, 2015 3:11 PM Flag

    Copper's dumping because Chinese investors have been selling it, perhaps as they hit their pain tolerance level. I used to feel like Dr Copper was the great economic indicator it's always made out to be, but speculators started warehousing so much of it that the price has become sort of detached from the reality of supply and demand.

    It's a carpet bombing day in the energy sector (and pretty much anything else) and natural gas and oil are both nicely in the green. Odd, huh? Could just be some very fat shorts covering and getting liquid for the next attack. No reason to think oil has really turned yet.

  • Reply to

    New low for LGCY

    by kxviswan Jan 13, 2015 11:22 AM
    petroglyph56 petroglyph56 Jan 13, 2015 11:58 AM Flag

    I have to wonder if it's LGCY-specific when I see VNR (gassier, different hedges) trading down more or less in lockstep today.

    As far as the deer in headlights thing, I'm there with you, much to my annoyance. It never passed through my mind that a 2% oil surplus could be the tail the shook the dog this hard.

  • Reply to

    Demand for Oil

    by woodfrog8 Jan 2, 2015 9:04 AM
    petroglyph56 petroglyph56 Jan 5, 2015 7:47 PM Flag

    It's always good to get a perspective from somebody in the energy business. I'm not in the game, but I got some early exposure from my Grandfather having a tiny exploration company poking shallow wells up around Abilene back in the 70s. For better or worse, I've been investing in the sector ever since. For worse, lately.

    I have been kicking myself for not remembering the last time the Saudis refused to take one for the OPEC team back in the 80s. That was when the North Sea was coming on big, and the Saudis were left in a similar position, too much oil and everybody looking at them to make it right. They made everybody suffer, in much the way they are now. The similarity seems clear in hindsight, but then I'm always a lot sharper eyed looking back than forward. As are most, I suppose.

    The increase in American production has been remarkable, and what's happened here in TX and up in North Dakota has truly shaken the world. When I answered Wood about whether there's been a S/D change anything like the price change, all that was left unsaid, as I was addressing what'd little changes had happened since last summer. There have been lots of barrels piling up on the camel's back, so to speak, and finally it was one too many for the fiction to hold that oil was rare enough to be $100 a barrel.

    The bad news is that I'm long some energy names. Trimmed sails when I should have cut down the mast. The good is that I'm sitting on 60% cash. That lets me view this carnage with a mix of fear and greed, rather than only fear.

    Eventually the surge of production that's in the US system will taper. If I understand correctly, US oil production will actually start to contract within a year. This supremely cyclical business will do what it always does, turn back up. I don't think this will happen for quite a few months, and perhaps even years. It's not a pretty thought, but you have to be honest, not wishful.

  • Reply to

    Demand for Oil

    by woodfrog8 Jan 2, 2015 9:04 AM
    petroglyph56 petroglyph56 Jan 2, 2015 5:15 PM Flag

    And Happy New Year to you, Turbo.

    I am still long, although much less so than a year ago, having largely exited some months ago. Can't say I saw this coming, or I'd have dropped every share of the drillers like hot lava last summer.. The market provides more opportunities for humility than I'd prefer, even if over the long run it's been a good place to be.

  • Reply to

    Demand for Oil

    by woodfrog8 Jan 2, 2015 9:04 AM
    petroglyph56 petroglyph56 Jan 2, 2015 10:16 AM Flag

    Neither demand nor supply have changed all that much, there's been a growing 1-2 percent more supply than was needed for a while, inventories have gotten fat and it serves the Saudis interests to let that small oversupply drive the price down for a while. Strange but true, an extra million barrels (out of 90M+ consumed daily) is the tail that shakes the hell out of the dog.

    The sand and shale guys will cut back pretty hard on new production, but the actual downturn in production will lag by months. This will pass, but it'll take a while.

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