Filter Archive Listings

ALL
  • SHOW BY POST TYPE

ALL
  • Product

  • POPULAR TAGS

  • Shipping
  • Winter
  • market
  • prices
  • basis
  • nymex
  • market watch
  • basis price
  • sell-off
  • estimates
  • terminal
  • CT
  • gas
  • cash price
  • cash
  • futures market
  • september
  • october contract
  • October
  • buying
  • selling
  • weather
  • rally
  • market update
  • storage
  • new england
  • price bounce
  • forecasts
  • bull
  • bears
  • bulls
  • hurricane
  • storage report
  • bearish
  • supply availability
  • EIA
  • traders
  • optimistic
  • prices falling
  • futures
  • refined products
  • ULSD
  • gasoline
  • volatility
  • oil
  • iran
  • syria
  • november
  • positive
  • storms
  • government shutdown
  • decrease in demand
  • heating degree days table
  • debt ceiling
  • diesel
  • forecast
  • crude oil
  • trading
  • price
  • energy prices
  • gas prices down
  • crude
  • flat
  • down
  • market report
  • sprague
  • Globex
  • prices down
  • lowest
  • price decline
  • market down
  • futures contract
  • volatile
  • gas up
  • inventory report
  • DOE
  • PADD
  • december
  • settlement price
  • low price
  • rbob
  • prices up
  • gains
  • oil markets
  • doe inventory report
  • markets down
  • cold weather
  • heating oil
  • new england weather
  • markets up
  • demand
  • temperature
  • cold
  • oil market
  • iran deal
  • settlement
  • eia storage report
  • January
  • January 2014
  • ice brent
  • wti
  • heating degree day
  • recap
  • brent
  • keystone xl pipeline
  • transcanada
  • exports
  • up
  • china
  • industrial output
  • news
  • New York
  • chart
  • brent-wti spread
  • tapering
  • lfp
  • unemployment
  • interest rates
  • market movers
  • bullish
  • higher
  • eia report
  • january thaw
  • graph
  • Polar Vortex
  • vortex
  • refined
  • products
  • blog
  • data
  • DOE expectations
  • DOE inventory
  • distillates
  • tight supply
  • HDD
  • inventory
  • backwardation
  • contract expiration
  • moves
  • pricing
  • Ukraine
  • SPR
  • Strategic Petroleum Reserve
  • Venezuela
  • Russia
  • Houston Shipping Channel
  • Sour Crude
  • PMI
  • Houston Ship channel
  • NATO
  • API
  • American Petroleum Institute
  • Crimea
  • Refinery runs
  • HDD planning
  • low sulfur
  • sulfur content
  • MA
  • VT
  • NJ
  • RI
  • sulfur maximum
  • war
  • DOE inventory estimates
  • regular gasoline prices
  • gasoline demand
  • gasoline stocks
  • pent-up demand
  • driving season
  • libya
  • short term energy outlook
  • energy outlook
  • speculative
  • economic sanctions
  • quantitative easing
  • GDP
  • rail safety
  • canada
  • refinery
  • crudemovements
  • regulations
  • Northeast gasoline reserve
  • G-7
  • dependency arc
  • Yellen
  • Fed Chair
  • Nigeria
  • pop and drop
  • The South China Sea
  • oil rig
  • Vietnam
  • crude export ban
  • HO
  • market retreating
  • AAA
  • Memorial Day gas prices
  • travel
  • price movements
  • DOE inventory data
  • gasoline up
  • g-8
  • Putin
  • Cushing
  • Iraq
  • al-qaeda
  • ISIS
  • barrels
  • gallons
  • Islamic
  • Jordan
  • Turkey
  • Saudi Arabia
  • Kuwait
  • condensate
  • lease
  • stabilization unit
  • crude exports
  • net length
  • israel
  • Colombia
  • basis protection
  • imports
  • Bahrain
  • Yemen
  • Egypt
  • Soviet
  • Europe
  • MENA
  • Middle East
  • North Africa
  • geopolitical
  • hot spots
  • geopolitical hot spots
  • Risk
  • spec watch
  • islamic state
  • International Energy Agency
  • Energy Information Administration
  • drilling
  • Bakken
  • Permian
  • Eagle Ford
  • ISIL
  • OPEC
  • PADD 1
  • lower
  • Sweden
  • Ebola
  • US crude oil production
  • Crude oil producers
  • crude oil production
  • oil markets down
  • slide
  • contango
  • carry
  • trading range
  • Swiss Franc
  • Switzerland
  • European Central Bank
  • ECB
  • Euro
  • QE
  • USW
  • United Steel Workers
  • Strike
  • Greece
  • jobs
  • oil prices
  • jobs report
  • VIEW ALL TAGS

Market Intel Archives

Oil futures rose on Tuesday despite a rise in OPEC production for May

June 14, 2017

Recap:  After opening below unchanged, oil futures rose on Tuesday on what appeared to be technical buying, despite reports that OPEC production rose in the month of May. Skepticism over OPEC’s efforts to stem global oversupplies contained gains, with both WTI and Brent unable to trade above Monday’s high. July WTI settled at $46.46 a barrel, up 38 cents or 0.82%. Brent for August delivery tacked on 43 cents, or 0.89%, to settle at $48.72.

July RBOB rose 1.2 cents, or 0.8%, to $1.500 a gallon, while July heating oil gained 2.2 cents, or 1.6%, to $1.448 a gallon.

Fundamental News:  Bloomberg reported that crude stocks held in Cushing, Oklahoma fell by 1.4 million barrels in the week ending June 9th to 62 million barrels.

In its monthly report, OPEC stated that a long-awaited rebalancing of the oil market was underway at a slower pace than previously expected and added that its own output in May increased due to gains in nations exempt from the output cut agreement.  OPEC stated that its output in May increased by 336,000 bpd to 32.14 million bpd led by a rebound in Nigeria and Libya.  OPEC noted continued high compliance by its members with the supply deal and said oil stocks in OECD nations fell in April.  Supply from the 11 OPEC members with production targets under the accord, except Libya and Nigeria, averaged 29.729 million bpd in May.  OPEC said oil inventories in industrialized countries fell in April and would extend a decline for the rest of the year, but a recovery in production in the US was slowing efforts to get rid of excess supply.  OPEC lowered its estimate of supply growth from non-OPEC producers this year to 840,000 bpd from a previous forecast of 950,000 bpd, following a decision to extend the supply cut deal.  As a result, OPEC raised the expected demand for its crude this year by 100,000 bpd to 32.02 million bpd.   

Libya’s National Oil Corp warned authorities based in the east of the country not to use a rift between several Arab countries and Qatar as a pretext for exporting oil illegally.  The statement came after authorities in eastern Libya threatened to block operations by Glencore.  Any such move would put at risk a partial recovery in Libya’s oil production, which recently increased to over 800,000 bpd. 

Russia’s President Vladimir Putin and Saudi Arabia’s King Salman discussed the Qatar crisis in a phone call on Tuesday.

The EIA reported that proved oil reserves fell in 2016 for the second consecutive year.  The net reduction was 8.2 billion barrels year on year.   

According to Bloomberg, preliminary US waterborne crude imports fell by 449,100 bpd to 4.3 million bpd in the week ending June 8th.  The East Coast and Gulf Coast reported declines of 117,100 bpd and 403,700 bpd, respectively.  Imports to the West Coast increased by 71,700 bpd to 716,400 bpd.  Total crude and product imports fell by 325,900 bpd to 6.4 million bpd. 

IHS reported that crude and refined product shipments from the US Gulf fell to 4.19 million metric tons on 100 ships in the week ending June 8th.  It is down 10% from the previous week’s 4.63 million metric tons shipped on 111 ships. 

According to cFlow, S&P Global Platts trade flow software, arrivals of distillates in Europe in June from the US Gulf Coast are expected to total about 1.3 million metric tons.


Early Market Call - as of 9:14 AM EDT

WTI - July $46.22 down 24 cents

RBOB - July $1.4910 down 85 points

HO - July $1.4491 up 14 points


View the Sprague Refined Products Market Watch Report in a downloadable pdf format.


Click to view more online:
View market updates
View our refined products glossary
Go to SpraguePORT online

Oil futures rose on Monday, but gains were pared due to build in US crude oil inventories

June 13, 2017

Recap:  Oil futures rose on Monday, however, gains were pared prior to settlement on expectations of a slight build in U.S. crude oil inventories. July WTI gained as much as 1.9%, or 88 cents and August Brent tacked on 2%, before giving up some of their gains. WTI settled at $46.08 a barrel, up 25 cents, or 0.65, while August Brent tacked on 14 cents, or 0.3%, to settle at $48.29 a barrel. 

July RBOB settled at $1.488 a gallon, down 1.4 cents, or 0.9%, while July heating oil fell just over half a penny, or 0.4%, to $1.425 a gallon.

Fundamental News:  Genscape reported that crude oil inventories held in Cushing, Oklahoma in the week ending Friday, June 9th fell by 1,838,715 barrels on the week and by 407,747 barrels from Tuesday, June 6th to 64,444,217 barrels.

Saudi Arabia’s Oil Minister, Khalid Al-Falih, said the country does not see any need for changes to the OPEC/non-OPEC output cut agreement.  He said additional cuts are not necessary and added that the oil market will stabilize in the next few months.  He said a drawdown in crude inventories will accelerate in the next three to four months. 

Saudi Arabia will limit volumes of crude to some Asian buyers in July and deepen cuts in allocations to the US.  Saudi Aramco would supply full contracted volumes to at least five Asian buyers mainly in North Asia and lower volumes for some customers in India, China and South Korea.  Cuts in crude allocations to Asia in July would total about 300,000 bpd, more than in June.  Meanwhile, sources stated that crude allocations to the US have been lowered significantly and Aramco continued to curtail supply to Europe.    

Russia’s Energy Minister, Alexander Novak, said there is no need for an extraordinary OPEC meeting.  He also stated that the agreement to cut production and balance the market will achieve its objective in the first quarter of next year. 

Qatar said it is committed to the oil production cut agreement.  Qatar’s Energy Minister, Mohammed Al Sada, said the current circumstances in the region will not prevent Qatar from honoring its international commitment of cutting production under the OPEC/non-OPEC agreement. 

Iran’s Deputy Oil Minister and Managing Director of National Iranian Oil Co, Ali Kardor, said Iran will sign $15 billion of oil contracts by March 2018.  Priority will be given to the offshore South Pars gas fields and associated oil as well as the Azadegan oil field. 

Bernstein analysts stated that if OPEC producers are expected to achieve the goal of bringing back inventories to their 5 year average level, average weekly US crude draws of 4 million barrels are needed consistently for the rest of the year, with draws of 5 million barrels over the summer months.   

According to Euroilstock, crude oil intake at Europe’s refineries in May fell by 2.4% on the month but increased by 5.4% on the year to 10.175 million bpd.  European crude and oil products stocks in May fell by 0.1% on the month and by 0.5% on the year to 1.16 billion barrels.  It reported that European crude stocks increased by 0.4% on the month and by 0.2% on the year to 491.29 million barrels while gasoline stocks fell by 2.1% on the month and by 1.4% on the year to 119.6 million barrels and middle distillate stocks increased by 0.3% on the month and by 1.4% on the year to 453.9 million barrels. 

According to IIR, US oil refiners are expected to shut in 135,000 bpd of capacity in the week ending June 16th, increasing available refining capacity by 313,000 bpd from the previous week.  IIR expects offline capacity to fall to 253,000 bpd in the week ending June 23rd. 


Early Market Call - as of 9:00 AM EDT

WTI - July $45.93, down 15 cents

RBOB - July $1.4777, down 1.04 cents 

HO - July $1.4311, up 54 points


View the Sprague Refined Products Market Watch Report in a downloadable pdf format.


Click to view more online:
View market updates
View our refined products glossary
Go to SpraguePORT online

Crude market posted an inside trading day after a force majeure declaration in Nigeria

June 12, 2017

Recap:  The crude market posted an inside trading day after retracing some of its previous losses on news of a force majeure declaration in Nigeria prompted some buying.  The market held support at its previous low of $45.20 as it posted a low of $45.27 on Friday and rose to Thursday’s high of $46.18 following the news that Shell Development Co of Nigeria declared force majeure on Nigerian Bonny Light crude due to a leak on the Trans Niger Pipeline.  The WTI market, which failed to find further upside momentum, retraced some of its gains and settled up 19 cents at $45.83 ahead of the weekend.  The Brent market settled up 29 cents at $48.15.  The Dec 17-Dec 18 WTI spread remained pressured and traded down to -$1.16 before settling at -$0.99.  Meanwhile, the heating oil market settled up 89 points at $1.4312 and the RBOB market settled up 98 points at $1.5017.

Fundamental News Baker Hughes reported that US energy firms added oil rigs for a record 21st consecutive week.  Drillers added 8 oil rigs in the week ending June 9th, bringing the total count up to 741, the most since April 2015. 

Oil Movements reported that OPEC’s shipments are expected to fall by 180,000 bpd to 24.34 million bpd in the four weeks ending June 24th, compared with the four week period ending May 27th. 

Oil production from Nigeria and Libya, both OPEC members exempt from the output cut agreement, is threatening to flood the Atlantic Basin.  Nigeria has more than 60 million barrels of unsold crude while Libya is producing nearly triple the amount of crude this year compared with last year.  According to Energy Aspects, Nigeria and Libya have added 600,000 bpd of oil production.  Royal Dutch Shell lifted the force majeure on Nigeria’s Forcados crude this week, bringing the country’s oil exports fully online for the first time in 16 months and adding an additional 250,000 bpd to the world markets.  Libya’s oil production reached its highest level since October 2014 at 835,000 bpd this month. 

Libya’s National Oil Corp said the country’s Sharara oil field was reopened after a workers’ protest and should return to normal production within three days.  Sharara was producing nearly 270,000 bpd before employees went on strike on Wednesday over a lack of medical treatment for a colleague.

The Nigerian subsidiary of Royal Dutch Shell, SPDC, declared force majeure on exports of Nigeria’s Bonny Light crude on Thursday following a leak on the Trans Niger Pipeline. 

Morgan Stanley reported that seaborne oil exports in May increased by 2.2 million bpd on the month, with most of it due to exports from Libya, Nigeria and Iran. 

The Norwegian Oil and Gas Association reported that five Norwegian oil and gas fields will shut down production unless a wage deal is agreed with the Lederne trade union.  The shutdown would affect fields operated by Statoil, Shell and Eni and would cut output by 443,500 bpd of oil equivalent.  The deadline for talks is midnight Friday but the shutdowns would start on Sunday. 

Iran’s oil exports to the West increased in May to the highest level since the lifting of sanctions in early 2016 and almost caught up with volumes exported to Asia.  Iran has been increasing its output since 2016 to recoup market share lost to Saudi Arabia and Iraq.  Last month, Iran exported about 1.1 million bpd of crude to Europe, including Turkey, below the 1.2 million bpd supplied to Asia.  Iran’s overall May oil production totaled 3.9 million bpd.

IIR reported that US oil refiners are expected to shut in 438,000 bpd of capacity in the week ending June 9th, cutting available refining capacity by 68,000 bpd from the previous week. 


Early Market Call - as of 9:00 AM EDT

WTI - July $46.46, up 63 cents

RBOB - July $1.5083, up 64 cents

HO - July $1.4465, up 1.53 cents


View the Sprague Refined Products Market Watch Report in a downloadable pdf format by clicking the headline at the top of this email.


Click to view more online:
View market updates
View our refined products glossary
Go to SpraguePORT online

Oil market traded lower after Wednesday's DOE report which indicated a large build in crude stocks

June 09, 2017

Recap:  The oil market continued to sell off for the second consecutive session following Wednesday’s sharp decline on concerns over supply.  The market traded lower following Wednesday’s DOE report showing a larger than expected build in crude stocks and reports that Royal Dutch Shell lifted force majeure on exports of Nigeria’s Forcados crude.  The market traded mostly sideways overnight before further selling pushed the market to a low of $45.20.  It later bounced off that level and traded back towards the high posted early in the morning of $46.18 and settled in a sideways trading pattern ahead of the close.  The July WTI contract settled down 8 cents or 0.17% at $45.64 while the August Brent contract settled down 20 cents or 0.42% at $47.86.  The Dec17-Dec18 WTI spread continued its sharp sell-off on Thursday, as it settled at -$1.04, down from -$.50 on Wednesday.  Meanwhile, the product markets ended the session in positive territory, with the heating oil market settling up 61 points at $1.4223 and the RBOB market settling up 6 points at $1.4919. 

Fundamental News:  Genscape reported that oil inventories in Cushing, Oklahoma in the week ending Tuesday, June 6th fell by 1.6 million barrels on the week and by 1.4 million barrels from Friday, June 2nd to 64.9 million barrels.

Libya’s oil production has declined to 618,000 bpd following the closure at the Sharara oil field due to a protest by workers.  The field was pumping 250,000 bpd before it was shut down.   

Saudi Arabia’s King Abdullah Port on the Red Sea coast banned vessels sailing to or from Qatar from berthing at its facilities. 

Qatar’s Foreign Minister, Sheikh Mohammed bin Abdulrahman al-Thani, said Qatar is not ready to change its foreign policy to resolve a dispute with fellow Gulf Arab states and will never compromise.  While the foreign minister said Qatar had not yet been presented with a list of demands by countries which cut off ties with Qatar, he insisted it be solved by peaceful means.   

Statoil’s chief economist, Eirik Waerness, said OPEC and non-OPEC producers that agreed to cut their production will probably need to extend the cuts again to draw down crude stocks.  He said the key will be US shale output.  US shale producers added rigs for a 20th consecutive week, the longest streak in at least three decades. 

Societe Generale stated that OPEC will extend its production cuts in November and May 2018.  It said it will maintain its current targets through 2018, holding production at 32 million bpd.   

UBS cut its 2017 oil price forecast by $4/barrel and both its 2018 and 2019 price by $5/barrel.  It sees 2017 average Brent price forecast at $56/barrel from a previous estimate of $60/barrel, 2018 at $60/barrel and 2019 at $65/barrel.  It forecast WTI prices to average $53/barrel in 2017, down from a previous estimate of $57.50/barrel and $57/barrel in 2018 from a previous estimate of $63/barrel. 

Gasoline stocks held in the Amsterdam-Rotterdam-Antwerp hub in the week ending June 8th fell by 8.04% on the week and by 12.98% on the year to 892,000 tons.  Gasoil stocks fell by 0.52% on the week and by 14.76% on the year to 2.697 million tons while fuel oil stocks fell by 26.99% on the week and by 46.87% on the year to 568,000 tons. 

Colonial Pipeline Co is allocating space for Cycle 34 shipments on Line 20, which carries distillates form Atlanta, Georgia to Nashville, Tennessee.  It is also allocating space for Cycle 34 shipments on Line 1, its main gasoline line from Houston, Texas to Greensboro, North Carolina.


Early Market Call - as of 9:00 AM EDT

WTI - July $45.66, up 3 cents

RBOB - July $1.4963, up 40 points

HO - July $1.4299, up 74 points


View the Sprague Refined Products Market Watch Report in a downloadable pdf format.


Click to view more online:
View market updates
View our refined products glossary
Go to SpraguePORT online

Oil prices fell after DOE inventory report indicated unexpected build in crude stocks

June 08, 2017

Recap:  The oil market opened 21 cents lower on Wednesday as it retraced some of Tuesday’s late gains.  It posted a high of $48.23 and settled in a sideways trading range ahead of the release of the DOE’s weekly petroleum stock report.  The market later tumbled more than $2 to $45.92 in light of the inventory report showing an unexpected build in crude stocks of close to 3.3 million barrels on the week, breaking a two-month streak of declining inventories.  The crude market later retraced some of its losses in afternoon trading before it breached its earlier low and sold off to a low of $45.65 ahead of the close.  The July WTI contract settled down $2.47 or 5.1% at $45.72, the lowest settlement since May 4th.  The August Brent contract settled down $2.06 or 4.11% at $48.06.  The product markets also sold off sharply on the larger than expected builds reported in heating oil stocks of over 4.3 million barrels and 3.3 million barrels in gasoline stocks.  The heating oil market settled down 5 cents at $1.4162 while the RBOB market settled down 6.32 cents at $1.4913.

Fundamental News Platts reported that OPEC’s oil production in May increased by 270,000 bpd to 32.12 million bpd, driven by output recoveries in Libya and Nigeria, both of which are exempt from the organization’s production cuts.  OPEC’s total output was about 350,000 bpd above its stated ceiling of 32.5 million bpd. 

According to Reuters, exports of Qatari crude have not been impacted by a port ban imposed by other Gulf countries as tankers are loading Qatari crude along with cargoes from the UAE.  Two Very Large Crude Carriers, which can each carry up to 2 million barrels of oil, loaded Abu Dhabi crude grades on Wednesday, despite having taken on Qatari crude in an earlier leg of the voyage.  The loadings come amid Abu Dhabi’s easing of restrictions on oil cargoes going to or coming from Qatar. 

Citing a government official, Saudi-owned Al Arabiya television reported that the UAE wants to change Qatar’s policies, not its regime.  Meanwhile, the UAE said more moves against Qatar, including further curbs on business, remain on the table in a dispute with its neighboring countries, warning against allowing Iran to exploit the unprecedented rift.  UAE Minister of State for Foreign Affairs, Anwar Gargash, said it would be very complex to disentangle the business ties between Qatar and its neighbors but suggested this may be necessary.  He also stated that Arab states could impose an embargo on Qatar if it does not change course regarding its support of extremism and destructive policies in the region.  Qatar is talking to Iran and Turkey about securing food and water supplies to stave off possible shortages after its largest suppliers, the UAE and Saudi Arabia, cut trade and diplomatic ties.  Separately, Saudi Arabia’s Foreign Minister, Adel al-Jubeir, said Gulf states could resolve the dispute with Qatar amongst themselves without outside help.  He said he believed the issue could be dealt with among the states of the Gulf Cooperation Council.        

Royal Dutch Shell said its operations are not experiencing any operational disruptions in Qatar in the wake of a decision by several Gulf countries to sever ties. 

Separately, Royal Dutch Shell lifted a force majeure on exports of Nigeria’s Forcados crude oil on Tuesday afternoon.  The crude grade has been under force majeure since February 21, 2016 following a militant attack on the main export route. 

Libya’s National Oil Corp said that Libya’s current oil production is about 835,000 bpd and its target output is 1.25 million bpd before year end.  Libya’s oil production is facing problems from power shortages and pipeline leaks.  It also stated that foreign companies are responding positively to the special interim arrangements to allow them to continue working while security improves. 


Early Market Call - as of 9:00 AM EDT

WTI - July  $45.33, down 39 cents

RBOB - July $1.4826, up 12 points

HO - July $1.4154, down 4 points


View the Sprague Refined Products Market Watch Report in a downloadable pdf format by clicking the headline at the top of this email.


Click to view more online:
View market updates
View our refined products glossary
Go to SpraguePORT online

Oil market posted an inside trading day and settled in positive territory

June 07, 2017

Recap:  The oil market posted an inside trading day on Tuesday and settled in positive territory after posting losses during the two previous sessions.  While the news of the rift in the Middle East continued to circulate the market, the market remained in its recent trading range as the tension was not seen having much of an impact on oil supply.  Kuwait’s Oil Minister said Qatar remained committed to restricting crude output under the OPEC and non-OPEC output cut agreement.  The market opened unchanged at $47.40 and held its support at its previous lows as it posted a low of $46.94 in overnight trading.  It later traded to $47.74 and settled in a sideways trading pattern until some late morning buying pushed the market higher.  It rallied to a high of $48.23 in afternoon trading as traders positioned themselves ahead of the release of the weekly inventory reports, which are expected to show draws in crude stocks of 3.5 million bpd on the week.  The July WTI contract settled up 79 cents or 1.67% at $48.19, while the August Brent contract settled up 65 cents or 1.31% at $50.12.  Meanwhile, the heating oil market settled up 69 points at $1.4662 and the RBOB market settled up 1.64 cents at $1.5545.

Fundamental News Bloomberg reported that crude stocks held in Cushing, Oklahoma fell by 750,000 barrels to 64.07 million barrels in the week ending June 2nd.

In its latest Short Term Energy Outlook, the EIA cut its 2017 world oil demand growth forecast by 20,000 bpd to 1.54 million bpd and its estimate for 2018 by 10,000 bpd to 1.62 million bpd.  World oil demand in 2017 is expected to increase to 51.32 million bpd and to 52.58 million bpd in 2018.  OPEC’s oil production is estimated to fall by 230,000 bpd to 32.3 million bpd in 2017 but increase by 470,000 bpd to 32.77 million bpd in 2018.  US oil demand in 2017 is expected to grow by 320,000 bpd, up from a previous estimate of 290,000 bpd while demand in 2018 is forecast to grow by 310,000 bpd from a previous estimate of 300,000 bpd.  The EIA forecast Brent crude prices will average $53/barrel in 2017 and $56/barrel in 2018, while WTI crude prices are forecast to average $2/barrel less than Brent prices in both 2017 and 2018.  The EIA also forecast the price of regular gasoline in 2017 at $2.38/gallon.  In the 2017 summer driving season, US regular gasoline retail prices are forecast to average $2.46/gallon, compared with $2.23/gallon last summer.    

According to Hadi Djuraid, a special adviser to Indonesia’s Energy and Mineral Resources Minister, Ignasius Jonan, the country has applied to become part of OPEC once again.  Several members, including Saudi Arabia and the UAE asked it to rejoin, and OPEC has agreed to Indonesia’s requirement to be exempt from the group’s output cuts. 

Kuwait’s Oil Minister, Essam al-Marzouq, said Qatar remains committed to an oil output cut agreed upon by OPEC and non-OPEC producers last month.  Saudi Arabia, the UAE, Bahrain and Egypt severed ties with Qatar, accusing the country of supporting Islamists and Iran.  Qatar denies these charges. 

The UAE has banned all Qatari-flagged vessels and any ships travelling to and from Qatar from entering all its oil ports. 

An analyst at Citigroup said fears that there will be an oversupply of US shale is overblown.  He said that even with US production increasing at over 1 million bpd, he estimates 2018 oversupply of just 200,000 to 300,000 bpd. 

According to cFlow, S&P Global Platts trade flow software, about 1.15 million tons of distillates is expected to arrive in Europe from the US Gulf Coast in June. 

According to IHS, crude and refined product shipments from the US Gulf increased to 4.63 million metric tons on 111 ships in the week ending June 1st.  It is up 4% from the previous week’s 4.45 million metric tons on 106 ships. 


Early Market Call - as of 9:00 AM EDT

WTI - July $47.59, down 59 cents

RBOB - July $1.5267, down 2.75 cents 

HO - July $1.4539, down 1.21 cents


View the Sprague Refined Products Market Watch Report in a downloadable pdf format by clicking the headline at the top of this email.


Click to view more online:
View market updates
View our refined products glossary
Go to SpraguePORT online

Oil market erased gains after tension in Middle East is unlikely to impact oil supply

June 06, 2017

Recap: The oil market rallied higher in overnight trading due to a political rift in the Middle East. Saudi Arabia, Bahrain, the UAE and Egypt cut off most diplomatic and economic ties to Qatar on Monday, accusing the country of meddling in their internal affairs and supporting terrorism.  The market posted a high of $48.42 following the news.  However, the market erased its gains and sold off to a low of $46.86 by mid-day as traders assessed that the tension was unlikely to have an impact on oil supply.  The market later retraced some of its losses in afternoon trading and traded back towards the $47.50 level ahead of the close.  The July crude settled down 26 cents or 0.55% at $47.40 and the August Brent contract settled down 48 cents or 0.96% at $49.47.  Meanwhile, the heating oil market settled down 2.55 cents at $1.4593 and the RBOB market settled down 3.9 cents at $1.5381.

Fundamental News:  Saudi Arabia’s Energy Minister, Khalid al-Falih, said OPEC and non-OPEC producers have only just agreed to extend their crude oil production deal through to March next year but added that he will consider the need for deeper output cuts in July.  He was optimistic that the deal struck between OPEC and non-OPEC producers on May 25th would begin to start working by the end of June.  A five country monitoring committee overseeing the deal will meet in Russia over July 22-24th.  He hoped compliance to the agreement in May would be even better than April, when the committee reported 102% overall compliance.

Indonesia’s Energy Ministry officials said Indonesia sent a letter to OPEC requesting to reactivate its membership in the group as long as it can avoid output cuts.  Indonesia’s OPEC membership was suspended in December, less than a year after rejoining the cartel. 

Saudi Arabia, Bahrain, the UAE and Egypt cut off most diplomatic and economic ties to Qatar in a move designed to punish one of the region’s financial superpowers for its ties with Iran and Islamic groups in the region.  They said they will suspend air and sea travel to and from Qatar.  Saudi Arabia will also shut land crossings with its neighbor, potentially depriving Qatar of imports through its only land border. 

The National Union of Petroleum and Gas Workers of Nigeria has threatened to strike as it says the government has made a deal with oil company Oando over the Port Harcourt refinery without stakeholder involvement. 

The Trump administration is considering possible sanctions on Venezuela’s energy sector, including PDVSA, in what would be a major escalation of US efforts to pressure the country’s leftist government.  The idea of possible sanctions on its energy sector has been discussed at high levels of the administration as part of a wide-ranging review of US options, but officials said it remains under debate and action is not imminent.  Officials said the administration is moving cautiously, mindful that if such an unprecedented step is taken it could deepen the country’s economic and social crisis.   

Colonial Pipeline Co is allocating space for Cycle 33 shipments on Line 20, which carries distillates from Atlanta, Georgia to Nashville, Tennessee. 

Bank of America Merrill Lynch said more than 50 conventional oil projects will start up over the next five years, meaning shale producers and OPEC only need to deliver combined annual growth of 900,000 bpd to satisfy demand. 

HSBC forecast Brent crude prices at $56/barrel in 2017 compared with an estimate of $59.90/barrel and $65/barrel in 2018 from a previous estimate of $75/barrel. 


Early Market Call - as of 9:00 AM EDT

WTI - July $47.12, down 28

RBOB - July $1.5244, down 1.35 cents

HO - July $1.4454, down 1.40 cents


View the Sprague Refined Products Market Watch Report in a downloadable pdf format by clicking the headline at the top of this email.

Click to view more online:
View market updates
View our refined products glossary
Go to SpraguePORT online

Oil futures fell on concerns that US's exit of Paris agreement could worsen global supply of crude oil

June 05, 2017

Recap:  Oil futures fell for the second week in a row on concern that U.S. President Trump’s decision to exit the Paris climate agreement would worsen an already overflowing global supply of crude oil. Adding pressure to Friday’s trading session was a rise in the U.S. rig count, marking the 20th straight week the count rose. Both benchmarks fell as much as 3.3% during the session, with July WTI reaching a low of $46.74 and August Brent bottoming at $48.95. However, losses were pared ahead of the weekend. July WTI settled at $47.66 a barrel, down 70 cents, or 1.45%, and August Brent fell 68 cents, or 1.34%, to settle at $49.95 a barrel.

July RBOB fell 3.4 cents, or 2.1% to $1.568 a gallon, while July heating oil slipped 2.6 cents, or 1.8%, to $1.476 a gallon. Both contracts trade sharply lower for the week.

Fundamental News:  US energy firms added oil rigs for a record 20th week in a row.  Baker Hughes reported that the number of rigs searching for oil increased by 11 in the week ending June 2nd to 733. 

According to Bloomberg, OPEC’s compliance in May remained strong, despite an increase in production of 315,000 bpd to 32.21 million bpd.  It reported that every member of the group that agreed to an extension of the cuts had a compliance ratio of more than 95% last month.  Saudi Arabia cut more than what was agreed, with a compliance rate of 101%.

The US Census Bureau reported that US crude oil exports reached 1.001 million bpd in April compared with 834,000 bpd in March.  Exports to China stood at 323,000 bpd, while exports to Canada totaled 296,000 bpd and exports to the Netherlands totaled 78,000 bpd. 

Russia’s Deputy Prime Minister, Arkady Dvorkovich, said he did not believe that the global output cut agreement would be altered if prices for the commodity fell. 

TASS news agency reported that Saudi Arabia’s Energy Minister, Khalid al-Falih, said participants in the global oil output cut deal may consider the possibility of making deeper production cuts in November.  Separately, he stated that Russia’s Rosneft and Saudi Arabia’s Saudi Aramco will look into joint investments in assets in Saudi Arabia.

Russia’s Rosneft said oil producers in the US could add up to 1.5 million bpd to world oil output next year, erasing any gains from the OPEC/non-OPEC output cut deal.  It said the output cut agreement will not stabilize the crude market over the long term as US shale fills the supply shortfall.   

Lukoil’s Chief Executive Officer, Vagit Alekperov, said the company will start reducing oil production in Iraq from June as part of a global deal to cut output.  He declined to state the details, saying the reduction would not be significant.   

Kazakhstan’s Energy Minister, Kanat Bozumbayev, said the country has secured an easing of production cut obligations it committed to last year as part of Russia and OPEC’s output cut agreement, on account of rising volumes from the Kashagan field. 

Venezuela’s Oil Minister, Nelson Martinez, said Rosneft will get 70,000 bpd of oil exports this year from Venezuela under a loan deal involving Citgo. 

IIR reported that US oil refiners are expected to shut in 350,000 bpd of capacity in the week ending June 2nd, increasing available refining capacity by 81,000 bpd from the previous week.  IIR expects offline capacity to fall to 252,000 bpd in the week ending June 9th and to 127,000 bpd in the subsequent week.


Early Market Call - as of 9:00 AM EDT

WTI - July  $47.25, down 41 cents

RBOB - July $1.5595, down 1.77 cents

HO - July $1.4692, 1.50 cents


View the Sprague Refined Products Market Watch Report in a downloadable pdf format.


Click to view more online:
View market updates
View our refined products glossary
Go to SpraguePORT online

Oil futures continue to fall as Libyan production recovers and U.S. production climbs

June 01, 2017

Recap: Oil futures continued to weaken on Wednesday, with Brent falling back below $50 a barrel and WTI falling below $48 a barrel for the first time in 3 weeks. The persistent weakness comes in the face of OPEC-led output cuts, as Libyan production recovers and U.S. production climbs. Gains were slightly pared in both benchmarks, with July WTI settling at $48.32 a barrel, down $1.32, or 2.70%. July Brent fell $1.53, or 2.95%, to settle at $50.31 a barrel.

June RBOB fell 2.7 cents, or 1.6%, to $1.612 a gallon and June heating oil shed 3.4 cents, or 2.2%, to $1.515 a gallon.

Fundamental News:  Genscape reported that crude oil stocks in the week ending Friday, May 26th fell by 787,403 barrels on the week and by 73,420 barrels from Tuesday, May 23rd to 67,494,384 barrels. 

Bloomberg reported that crude oil stocks held in Cushing, Oklahoma fell by 700,000 barrels to 64.9 million barrels in the week ending May 26th. 

Saudi Arabia’s Energy Minister, Khalid al-Falih, said OPEC and non-OPEC producers are committed to bringing global oil inventories down to the industry’s five-year average.  Following a meeting with his Russian counterpart, Alexander Novak, they stated that they saw their cooperation in oil markets lasting after the current joint oil output agreement expires in March 2018.  Saudi Arabia’s Energy Minister reiterated his country’s position to do “whatever it takes” along with Russia to help stabilize the oil market, signaling an open-ended policy to reduce the inventory overhang and balance the market.  He also played down the threat of rising US shale production, stating that supplies coming from marginal barrels including shale production will not be sufficient to meet the future need for incremental capacity in the mid-term. 

Kuwait’s Oil Minister, Ali Khalifa Al-Sabah, said he expects oil prices to improve in July. 

The head of Libya’s National Oil Corp said the country’s oil production recovered to 827,000 bpd following a technical problem at the Sharara field. 

Crude inventories in the Amsterdam-Rotterdam-Antwerp region increased by 364,000 barrels in the week ending May 26th to 60.72 million barrels. 

IHS reported that crude and refined product shipments from the US Gulf increased to 4.45 million metric tons on 106 ships in the week ending May 25th. 

Bloomberg reported that preliminary US waterborne crude imports fell by 878,100 bpd to 4.5 million bpd in the week ending May 25th. 

Genscape reported that there were no crude-by-rail loadings at five monitored facilities on the US East Coast for the week ending May 19th, the first time since Genscape began monitoring the facilities in August 2013.  Volumes have been falling since reaching 145,000 bpd in the week ending April 14th. 

The EIA’s Petroleum Supply Monthly report showed that US gasoline demand fell year on year for the third consecutive month in March.  US gasoline demand in March fell by 0.5% on the year to 9.353 million bpd.  Meanwhile, distillate demand increased by 5.4% to 4.15 million bpd in March.  The EIA also reported that US shipments of crude via rail in March increased by 71,000 bpd on the month to 469,000 bpd. 


Early Market Call - as of 9:00 AM EDT

WTI - July $48.43, up 11 cents 

RBOB - July $1.5983, up 17 points

HO - July $1.5095, down 83 points


View the Sprague Refined Products Market Watch Report in a downloadable pdf format.


Click to view more online:
View market updates
View our refined products glossary
Go to SpraguePORT online

OPEC's decision to not raise level of output cutbacks pushed oil prices lower.

May 31, 2017

Recap:  Tuesday’s trading session was choppy, as oil futures traded on both sides of unchanged, with July WTI initially recapturing the $50 level. Disappointment over OPEC’s decision not to raise the level of output cutbacks, in conjunction with the recovery of Libyan output, pushed oil prices lower. July Brent slipped to a low of $51.60 before severing losses, finishing the session at $51.84, down 45 cents, or 0.80%.  WTI for July delivery bottomed at $49.03 prior to recapturing some of its losses, to settle at $49.66, down 14 cents, or 0.28%.

June RBOB fell less than half a cent, or 0.2%, to $1.639 a gallon, while June heating oil lost 1.4 cents, or 0.9%, to $1.549 a gallon.

Fundamental News:  Russia’s President, Vladimir Putin, is scheduled to meet Saudi Arabia’s Deputy Crown Prince, Mohammed bin Salman, on Monday after the oil exporters reached a deal to extend cuts for another nine months.

The head of Russia’s Rosneft, Igor Sechin, and Saudi Arabia’s Energy Minister, Khalid al-Falih, discussed cooperation during their meeting on Tuesday.  They also discussed possible ways of cooperation between Rosneft and Saudi Aramco in upstream, downstream as well as in liquefied natural gas projects and trading.  They also praised the outcome of last week’s meeting between OPEC and non-OPEC producers. 

Libya’s National Oil Corp said the country’s oil production was at 784,000 bpd due to a technical issue at the Sharara field, but was expected to start increasing to 800,000 bpd on Tuesday. 

Alberta’s provincial government said it remained steadfastly committed to seeing the Trans Mountain crude pipeline through to completion. 

Colonial Pipeline is allocating space for Cycle 32 shipments on Line 1, its main gasoline line from Houston, Texas to Greensboro, North Carolina. 

Japan’s Ministry of Finance reported that the country’s crude imports from Iran in April increased to about 41,000 bpd from zero a year ago. 

Goldman Sachs stated that 2018/19 oil futures need to remain at or below $50/barrel to discourage further shale production increases and encourage OPEC to maintain a range bound market.  It said falling US production costs will keep supply rising for years to come.  It also said that once OPEC’s production growth resumes after its self-imposed cuts, US and OPEC output is expected to increase by 1 million bpd to 1.3 million bpd between 2018 and 2020.  It forecast 2017 and 2018 WTI crude prices at $52.92/barrel and $55/barrel, respectively.  It also forecast 2017 and 2018 Brent crude prices at $55.39/barrel and $58/barrel, respectively.

JP Morgan cut its 2018 Brent oil forecast by $10/barrel to $45/barrel.  It also cut its 2018 WTI forecast by $11/barrel to $42/barrel.  It said the oil market will need to accommodate a substantial build in inventories next year which will weigh on prices.   

According to Bloomberg, total US waterborne LPG exports from Houston, Port Arthur, Philadelphia and Seattle increased by 2.3% to 849,570 bpd in the week ending May 25th. 

IIR reported US oil refiners are expected to shut in 341,000 bpd of capacity in the week ending June 2nd, increasing available refining capacity by 90,000 bpd from the previous week.  It also expects offline capacity to fall to 252,000 bpd in the week ending June 9th. 


Early Market Call - as of 11:55 AM EDT

WTI - July $48.35, down $1.31

RBOB - June $1.6027, down 3.74 cents

HO - June $1.5152, down 3.5 cents


View the Sprague Refined Products Market Watch Report in a downloadable pdf format by clicking the headline at the top of this email.


Click to view more online:
View market updates
View our refined products glossary
Go to SpraguePORT online