Weekly Petro Report...I have a bad feeling about it...don't know why.

Here is what analysts are expecting:

Analysts surveyed by Dow Jones Newswires expect crude oil inventories to show a gain of one million barrels in the week ended Oct. 5. Gasoline inventories are expected to drop by 300,000 barrels.

Fairly dismall estimate, given the build that is needed.

CRUDE up above $82 already this AM.

And here's what they got:

Summary of Weekly Petroleum Data for the Week Ending October 5, 2007

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) fell by 1.7 million barrels compared to the previous week. At 320.1 million barrels, U.S. crude oil inventories are above the upper end of the average range for this time of year. Total motor gasoline inventories increased by 1.7 million barrels last week, and are well below the lower end of the average range. Both finished gasoline and gasoline blending components rose last week. Distillate fuel inventories decreased by 0.6 million barrels, and are in the upper half of the average range for this time of year. Propane/propylene inventories increased 1.4 million barrels last week. Total commercial petroleum inventories decreased by 0.4 million barrels last week, but are in the middle of the average range for this time of year.

Why are distillate inventories decreasing? Doesn't that include heating oil? Shouldn't they be building stocks this time of year?

I thought this section was interesting:

Total products supplied over the last four-week period has averaged 20.5 million
barrels per day, unchanged compared to the similar period last year. Over the last
four weeks, motor gasoline demand has averaged 9.2 million barrels per day, or 0.4
percent below the same period last year. Distillate fuel demand has averaged 4.2
million barrels per day over the last four weeks, up 1.3 percent compared to the
same period last year. Jet fuel demand is down 4.6 percent over the last four weeks
compared to the same four-week period last year.

Gasoline and Jet fuel demand down from last year.

My thoughts exactly.

Crude down as well!

Gasoline desperately needed a boost, maybe they diverted some production?

However, Distillates are very low over last year - 13.2 MILLION barrels lower than last year. 3.14 production days less.

And propane, which had a small build, is still 10.7 Million barrels lower than 2006.

UP this week to 74 Million barrels less petroleum stock than 2006, in the US. (Approx. 35 VLCC tankers worth)

Yeah right, it's speculators. (sorry carryover from previous posts - baggage)

There was an almost palpable sense of panic among the talking heads on CNBC this morning regarding the oil market. One of the talking heads said something along the following lines:

Proposed reasons for high oil prices range from increasing demand worldwide to geopolitical concerns. (Let's see, what's missing from this list?)

They then went on to propose a third reason. (Declining export capacity perhaps? Nope.)

They blamed high oil prices on the DOE's ongoing efforts to replenish the SPR. (Anything but declining oil exports.)

It gets a bit frustrating. Apparently Schlesinger, of all people, told the ASPO crowd in Cork that "we are all peakists now", and there are certainly signs that smart people are increasingly seeing how the writing's on the wall. Yet I find that the business press goes to unbelievable lengths to deny what is so obvious to most of us. Similarly, we hear more or less upbeat assessments of the economy, while there is little to indicate that things might NOT be horribly wrong in more than a few ways.

Any MSM organisation that needs to make a profit is only going to tell good news to the end user who will ultimately actually pay for the service. MSM need repeat business or they fail.

Don't blame MSM, they know their market - the punters don't want to know about anything bad - nobody makes a living selling things people don't want, it's as simple as that.

The MSM only give 'bad' news that has happened, not bad news about things that 'may' happen in the future - if you expect more, sadly, I fear you will be disapointed.

The reality of the way MSM operates is very bad news for any mitigation of peak oil, AGW etc.

Politicians are from the same mold, they only ever react to things that everybody can see and that they can't deny ... even then, they are way too slow if we did actually have a peak in 2005, as seems likely.

Xeroid.

I was talking to a friend of mine who is a *very* high-level consultant to one of the oil supermajors. He told me that a recent strategy meeting someone brought up the idea of peak oil. The consensus of the room was apparently "yup, this is pretty much happening now or soon". I said to him - "Didn't anybody say 'Don't worry, we can increase recovery factors' or 'Don't worry Saudi will pump lots more'?" His answer - no. I was staggered that there didn't seem to have been any serious resistance to an idea that the oil majors will just not countenance in public.

Cuchulainn

Job requirements; Must have good, 'Front-Office' appearance. (read, Poker-face)

Yeah, it seems that by now honest people admit it, no matter how annoying it may be. So what the f*** is wrong with the business press??

all you have to do is read the papers after 1929 market crash - that say the same things back then that MSM would say now......its a memorized prayer not a rational discussion

Oil jumps nearly $3 as supplies fall

Oil prices jumped nearly $3 a barrel Thursday following a surprise drop in U.S. crude inventories, a strike at Chevron's operations in Nigeria, and a fire at BP's Alaska oil field.

U.S. light crude for November delivery rose $2.77 to $83.03 a barrel. Oil had traded up $2 just prior to the release of the U.S. government's inventory report.

This article gives the lowdown on why the market has reacted with such a steep hike:

http://www.easybourse.com/Website/dynamic/News.php?NewsID=317172

Are we headed for an another all-time WTI high today ?

Leanan,

When did you see this weekly EIA report? I thought they came out at 10:30 EDT, but it looks like you posted it before then. The time tag on my computer says 9:26 (CDT).

Test

TOD seems to be about 5 mins slow

Pay no attention to the time stamps on the posts. The server clock is wrong.

OK, but what about the man behind the curtain with his hands on the levers? [A new conspiracy theory in the making?] :<)

It looks like 1.7M barrels have been made into gasoline, but not heating oil. Gasoline prices are down. Is it simply that they have elected to continue producing gasoline, instead of switching to more heating oil, otherwise the price of gasoline might rise? Of course this is a conspiracy theory, but it is also a simple explanation for what it looks like.

Well...if temps stay high...this might be a safe bet. It is however turning colder now across the country. It may have been a bad decision. As usual, time will tell.

I was reviewing the oil/gasoline weekly structure the other day and noted that this "pattern" for oil and the pattern for gasoline look a lot like 2004.

Granted we haven't had the hurricane activity of 2004. But what we have had is separation of oil costs from weekly gasoline prices.

From 1991 until early July 2004, gasoline and oil prices were well-correlated. They still are from a statistical standpoint, but gasoline rapidly caught up with oil prices this spring (using 1992 average cost for each as a value of 1.0), but then oil prices climbed after a short pause while gasoline prices fell (this while gasoline inventories were at recent historic lows). If the pattern for 2007 is similar to 2004 (in 2004 that rapid growth of supply was beginning to slow), then we have several more weeks or increased oil prices before demand might decline enough to lower oil prices.

Gasoline prices seem, for whatever reason, intentionally low compared to the price of oil. If 2004 is any guide (and it might not be depending upon stocks), gasoline prices would be expected to finally climb into November, before showing a brief winter decline. Gasoline prices are already above the average for 2006 and unless gasoline suddenly dropped to $1.50/gallon, it's going to remain higher (as an average).

We'll see in a few minutes how things go.

Oil stocks down by 1.7 million barrels, gasoline stocks up by 1.7 million barrels , refinery capacity at 87.8. Distillate fell by 600,000 BBLs.

Best guess (by me): the US supply is still wandering around someplace. Oil prices to remain high for another week or two.

Isn't this the wrong time of year for distillates to be falling ?

Best Hopes for my 240D when I need to fill up 2 months from now,

Alan

Yes, it is the wrong time.

No worries, mate. Full speed ahead.

I'm not worried at all.

I think there's going to be GW induced tropical weather coming to the US this winter!

Negative. My bet is mega-cold winter once it finally comes, although I anticipate it to be a bit delayed in coming. :)
~Durandal (http://www.wtdwtshtf.com/)

A couple of things here:

Venezuelan state oil company PDVSA restricted the sale of fuel to gasoline stations because of problems at the 135,000 barrel per day El Palito refinery that usually supplies the area, Diana Santiago, the head of the local gasoline chamber, said.

A union worker at El Palito said the refinery had not restarted after a power outage last week, which he said caused the supply problems. The lines stretched from gas stations into city streets disrupting traffic, residents said. Some stations ran out and many drivers lined up before dawn to obtain fuel in a country that is one of the largest US oil suppliers.

"People are really nervous. There are too many lines and many stations are running out and closing," said Elimir Hernandez, a truck driver who waited more than an hour for fuel.

Last week, PDVSA said it took key units at the El Palito refinery offline due to a power outage.

The company has still not restarted the units, a union official with knowledge of the operations said. A PDVSA refinery official declined to confirm if the units were online, although it has guaranteed supplies would be maintained. There have been repeated accidents, technical failures and power outages disrupting oil operations in the last few years."

OK. That's Venezuela. They don't know what they're doin?

But what about this?

Houston (Platts)--8Oct2007

Valero's 135,000 b/d Wilmington refinery restarted as planned over the
weekend after a shutdown last week, and by Monday was operating normally,
company spokesman Bill Day said.
The refinery was idled October 3 due to a power failure in the area that
had also knocked ConocoPhillips' 139,000 b/d Wilmington refinery out of
service.
Portions of that refinery remain offline and it was running at reduced
rates, a ConocoPhillips spokeswoman said earlier Monday (1627 GMT).
--Matthew Cook, matthew_cook@platts.com

http://www.petroleumnews.com/pntruncate/234499446.shtml

Prudhoe Bay production began the month at 300,932 bpd, dropped to 183,417 bpd on Sept. 13 and was only back up to 242,857 bpd at the end of the month, averaging 235,650 bpd in September, compared to 300,308 bpd in August, a drop of 21.5 percent. Prudhoe production includes western satellites Midnight Sun, Aurora, Polaris, Borealis and Orion.

Question? How come Venezuela gets badly hit on a 135 K
Refinery out for a week, but CA and the rest of the US
continue boosting gasoline after two 300 k Wilmington
Refineries have been out for a week (w/ ConocoPhillips'
still not completely up?)

And how are we making up for Prudhoe/Cantarell?

Arkansaw of Samuel L Clemens

uhh-- abiotic oil, I believe. The U.S. has a pipeline to the mantle (or maybe it's the outer core) which is actually made of oil, and until the proper technology was discovered by the Russians (who now seem to have forgotten how to make it work) that oil just had to seep up into granite reservoirs. Now the smart U.S. engineers can just go get it directly and pump it to your local gas station.

LMAO-thanks for that.

But on a more serious note (while I'm still laughin' 8D) to all:

No fuel for export in 2008

According to the Ministry of Energy and Petroleum, fuel for export declined from 112,710 bpd in 2000 to 78,450 bpd in 2004 (File Photo)
Analysts estimate that if any domestic oil refinery faced operational problems cutting production by 10 percent, Pdvsa would be forced to import gasoline components or finished fuels.

With the latest 135k refinery down, Venezuela just
hit WT's ELM.

WTI Crude at $83.30.

And -speaking of Soviet Abiotic Command Economies-US Gasoline must be in Soviet Command Economy Mode
now.

Arkansaw of Samuel L Clemens

Just a reminder I've been banging the drum so to speak on the concept of double export land this is the re-exporting of finished oil products such as gasoline etc. In my opinion the double export land will decrease much faster than WT crude oil export land model and will represent the canary in the coal mine so to speak for global declines in exports. So far as a leading indicator of WT export land model it seems to be doing pretty good. The next stage is when overall refining capacity is significantly over overall oil supply. I think we are at that point or very close now and we should be there by this summer.

So for sure this summer I think two peak oil conditions will exist.

1.) Exports of finished products such as gasoline will be curtailed
2.) Refining capacity will be greater than supply and we may find certain countries actually shutting in capacity thats no longer profitable because of high crude prices putting even more pressure on gasoline exports from the more efficient complex refiners.

Note how WT export land and the pressure of oil prices seems to interact in a negative manner with inefficient idled refinery capacity.

I'm pretty interested to see how the US which is heavily dependent on gasoline imports will handle this. Since I think we will see a fairly big spread between the cost of locally refined gasoline and imported gasoline. And of course what about Mexican gasoline exports from the US ?

I think it is actually much worse than that.

I'm waiting to hear what westexas and khebab have to say in their ASPO presentation on the Export Land Model (ELM).

I am fairly sure ELM has some very serious consequences for Europe.

Xeroid.

No, I think it's EVEN worse than THAT...
--
All these memories will be lost in time
like tears in rain