Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Love Is Oil

Published 02/14/2019, 10:54 AM
Updated 07/09/2023, 06:31 AM

The price of oil is like a big love Valentine to oil bulls as the market rises despite bearish data from the Energy Information Administration (EIA) and news that Texas pumped the most tea since 1972. Oil market pessimism has given way to oil price optimism as perceived progress on the U.S.-China Trade war front, along with the OPEC cartel, led by Saudi Arabia, that is determined to drive the global oil market into a supply deficit. President Donald Trump reportedly is considering pushing back the deadline for imposition of higher tariffs on Chinese imports by 60 days, because he said the talks are going well and it will give negotiators time to cement a deal and unleash the bullish economic spirits.

The oil market is also starting to fret more about Venezuela and their heavy oil supply because the standoff does not look like it will have a quick end. While the U.S. and other Western Countries has recognized Juan Guaidó, an opposition leader, as Venezuela's interim president, disputed President Nicolas Maduro says he is not going anywhere. President Donald Trump is going to talk about the "turmoil" in Venezuela with Colombian counterpart Ivan Duque. Every day Venezuelan oil is stranded, the more bullish it will be for oil products.

The AFP reports that Venezuela's opposition-controlled congress named new temporary board of directors to state-oil firm PDVSA and its U.S subsidiary on Wednesday, to attempt to wrest the OPEC nation's oil revenue from President Nicolas Maduro. An increasingly isolated Maduro lashed out at the congress leader Juan Guaidó, saying in an interview that he would face the courts "sooner or later" for violating the constitution after he declared himself interim president last month.

Although many Western countries have recognized Guaidó as legitimate head of state, Maduro retains control of state institutions and Guaidó needs funds if he is to assemble an interim government. Controlling PDVSA's U.S. refiner Citgo Petroleum, Venezuela's most valuable foreign asset, would go some way to helping in that, though seizing the reigns of PDVSA itself seems improbable while Maduro remains in power.

Oil is in breakout mode as the risk-on trade is feeling the love. Yes, it was a bearish EIA report but that may not matter. U.S. refineries operated at 85.9% of their operable capacity last week, a bigger than expected drop. This could be because of maintenance but also because refineries are missing heavy sour Venezuelan and Saudi crude. A drop in demand led to bearish Petro builds across the board. The EIA said crude oil inventories increased by 3.6 million barrels from the previous week. At 450.8 million barrels, U.S. crude oil inventories are about 6% above the five-year average for this time of year. Motor gasoline inventories increased by 0.4 million barrels last week, about 4% above the five- year average for this time of year.

Demand did fall off the map but, on average, demand is still strong. Over the past four weeks, motor gasoline product supplied averaged 9.0 million barrels per day, up by 0.7% from the same period last year. Distillate fuel product supplied averaged 4.3 million barrels per day over the past four weeks, up by 6.5% from the same period last year. Jet fuel product supplied was up 1.2% compared with the same four-week period last year.

Distillate fuel inventories increased by 1.2 million barrels last week and are about 2% below the five-year average for this time of year.

Latest comments

whts about oil.where sell.out .54.93 sell.wht idea howuch decrese oil .?
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.