[energyaddict]

Brent price is up USD 0,80 from yesterdays closing - up to now. Is there a connection between texan refineries and London Brent price - I would say no!

2005 will be a very interesting year...

[2007]

I can understand if products are up after a refinery fire.

But shouldn't a ref fire mean more crude?

[tpm]

$this->bbcode_second_pass_quote('2007', 'I') can understand if products are up after a refinery fire.

But shouldn't a ref fire mean more crude?

[mgibbons19]

$this->bbcode_second_pass_quote('2007', 'I') can understand if products are up after a refinery fire.

But shouldn't a ref fire mean more crude?

[NevadaGhosts]

A fall in gasoline stockpiles already? Just last week I read news articles claiming higher gasoline reserves than expected (which lowered the price of oil). Something's not right here. Answers anyone?

http://money.cnn.com/2005/03/31/markets ... /index.htm

[ohanian]

$this->bbcode_second_pass_quote('NevadaGhosts', 'A') fall in gasoline stockpiles already? Just last week I read news articles claiming higher gasoline reserves than expected (which lowered the price of oil). Something's not right here. Answers anyone?

http://money.cnn.com/2005/03/31/markets ... /index.htm

[pup55]

A new report comes out every week. It's released at 10:30 AM on the US-EIA website.

Last week, supplies were up, and the market got soft. This week supplies are down, the market goes nuts.

With the market nervous like it is, even numbers in a given direction will cause a lot of stir if they are too far off from peoples' expectations.

What you need to look for is a longer-term trend, such as, if the supplies go up or down several weeks in a row. Until that happens, it's just random, like vegas.

[BabyPeanut]

High demand due to high population consumes reserves faster. The same volume doesn't last as much time as it used to.

[ernest]

The oil and NG reports come out weekly and have big impacts on crude and NG prices.

Also, with a refinery fire in Texas, there is huge bad news for gas supplies. USA refiners are already working at peak capacity and no new refineries built in THIRTY years.

[Raxozanne]

Whenever I read a news report on oil prices it always seems to me like they are saying that the oil price is based mostly upon US stockpile levels. So that if stockpile levels are up, then prices fall, alternatively if stockpile levels fall then prices go up. Someone mentioned a while ago that these stockpiles in the case of an emergency would only last a month or less. So why do stockpile levels have such an impact on world oil prices?

[BigBear]

Very good question Raxozanne and one that has puzzled me for along time also. With the U.S. having approx. 320 million barrels in reserve and using approx. 20 million barrels/day--this means they have a whole 16 days worth in reserve--hardly anything to jump and shout about. I believe it is the IEA that recommends all countries have at least a 90 day supply of oil in reserve --meaning 1,800,000,000 for the U.S. alone-something that obviously will never become reality.
All I can suggest is that they play on the ignorance most people have in this area of actual oil use--320 million sounds like and is alot of oil--the number gives people a false confidence and hence helps to lower market bidding.

[mididoctors]

IIRC the number of days refers to the number of days the SPR could substitute for foreign imports. IE internal US production is not counted as the SPR is or was designed to overcome disruptions from further afield

Boris
london

[aahala]

The news reports of the connection between US reserves and crude prices
are possibly overstated.

To the extent it's true, it's because in the short run neither demand nor production can change much, so any increase or decrease in the amount
available in the next few days or few weeks must mostly come from reserves.

[BigBear]

Thanks Boris--yes that makes sence--of course---still though you have to wonder why an amount so small would affect traders so as 320 million barrels is only approx. a one month supply if only figuring in import replacement--maybe not even that--so still nothing to jump and shout about. It still makes no sence that traders should be so affected by this relatively small amount of reserves.

[RonMN]

There are the stratiegic oil reserves...the oil reserves that are in the pipeline (about to be turned into gasoiline)...and gasoline "stocks" How much is already been turned into gasoline & waiting to be sold.

Watch to see which of the 3 they are really talking about.

The only way the STRATIEGIC reserve should matter is that it takes oil OFF the market, therefor less oil on the market means higher prices. If this particular reserve was opened up today & all the oil released, then prices would drop to about $10 a barrel...but leaving us with nothing for an emergency.

[pup55]

We have been following the weekly inventory report in the "current events" thread for awhile.

What is important is not the size of the stockpile, per se, but the "energy balance". People are focusing on this number emotionally, and even the stock traders are using it as a short-term indicator of economic strength.

If US consumption is 20 mbd, and US production and imports are 20 mbd, then demand and supply are in balance for that week, more or less, and the inventory does not change.

If consumption is 20 mbd and US production and imports are 21 mbd, then the inventory goes up by 7 mb for that week. Similarly, if consumption goes down to 19 and production plus imports stay at 20, inventory goes up.

Same thing in reverse, if consumption is greater than production and imports, the inventory goes down.

The oil traders and others are looking at these inventory figures every week as a gauge of whether or not the supply/demand balance is correct. For about the last 4 weeks, inventory has gone up, refinery usage has stayed the same, so we can deduce from that, despite the gloom and doom, there is sufficient supply at the moment, given the level of consumption we are experiencing.

The balance was negative back in the January/February time frame.

When this inventory starts to drop it means we are either consuming more, or producing or importing less. There is some noise in the system, though, and these big oil tankers hold 2 million barrels, so if a tanker shows up on Friday instead of Monday it can make a noticeable difference in the inventory balance. So, you have to not get excited over small fluctuations, but look at trends over time to see what is really happening.

Per the above, refining is constant, inventories are going up, we are building inventory, there is enough oil, for now.

[BigBear]

THANKS Folks for your explanations---they helped tremendously--

[JoeW]

$this->bbcode_second_pass_quote('pup55', 'W')hat is important is not the size of the stockpile, per se, but the "energy balance". People are focusing on this number emotionally, and even the stock traders are using it as a short-term indicator of economic strength.

[smiley]

$this->bbcode_second_pass_quote('', 'T')he oil traders and others are looking at these inventory figures every week as a gauge of whether or not the supply/demand balance is correct. For about the last 4 weeks, inventory has gone up, refinery usage has stayed the same, so we can deduce from that, despite the gloom and doom, there is sufficient supply at the moment, given the level of consumption we are experiencing.

[khebab]

Everything is in the way you present the data. If you look at the number of barrels, we are on the high range. However, if you divide your oil inventory by the forecasted consumption you obtain the equivalent number of days of projected consumption. Because demand is growing fast, the number of days is actually declining compared to previous years.