US Production is holding 10.27 mil BBL/Day. Inventories dropped 1.6mil BBL with crude exports just over 2mil BBL/Day and Refined Petroleum Products 4.7mil BBL/Day. So nothing overly different to recent trends. The US dollar dropped a little, but also has not shifted into new downward trend. The chatter that the Inventories drop was ‘meaningful’ is actually meaningless! I think oil is higher because of trend followers looking at 6month trends thinking prices are coming off some imagined trend line, and that prices should rise because of that.
Chesapeake Energy (NYSE:CHK)’s report was quite bullish for the efficiencies they have achieved. Drilling crews have developed periods of idle time due to being able to ramp production so efficiently that gathering systems cannot take it away fast enough which means they have to slow drilling/completions.
I am surprised that US inventories have not built during this seasonal catalyst change-over and maintenance period. Means consumption is higher than the last 2-3yrs.
