Is it good news or bad for crude oil? “This Week in Petroleum” published by the EIA stated off with an analysis of the 29% drop in inventory at Cushing
Is it good news or bad for crude oil? “This Week in Petroleum” published by the EIA stated off with an analysis of the 29% drop in inventory at Cushing Oklahoma. Crude oil inventories at Cushing, Oklahoma, the primary crude oil storage location in the United States and the delivery location for the New York Mercantile Exchange (Nymex) West Texas Intermediate (WTI) crude oil futures contract, declined 12 million barrels (29%) over the past seven weeks. On March 14, 2014, Cushing inventories were 30 million barrels, 19 million barrels lower than a year ago and the lowest level since early 2012.
The recent drawdown of stocks at Cushing resulted from (1) the startup of TransCanada’s Cushing Marketlink pipeline, which is now moving crude from Cushing to
Brent oil is trading at 106.20 up by 26 cents as the spread once again narrows and will most likely push the price of Brent oil higher. West Texas Intermediate crude’s discount to Brent was the narrowest in a week as plans to expand a U.S. pipeline buoyed the grade, while easing concern of a Russian supply loss eroded the European benchmark. Brent, more sensitive than WTI to global supply disruptions, fell 0.5 percent Wednesday amid diminished concern that Russian exports could be curtailed by the dispute with the West following the annexation of Ukraine’s Crimean region. WTI was about $7.67 a barrel cheaper than Brent after the gap between the two shrank 8 percent Tuesday.
Natural gas gave up yesterday’s gains to trade at 4.443 after markets reacted to stronger US dollar and an upturn in the weather forecast. The U.S. Energy Information Administration (EIA) on Thursday is expected to report a natural gas storage withdrawal between 57 billion cubic feet (Bcf) and 61 Bcf for the week ended March 14, according to a Platt’s survey of analysts. A number within that range would be smaller than last year’s 74-Bcf withdrawal but larger than the five-year-average pull of 30 Bcf, according to EIA data. Beyond the consensus, the wider range of analysts’ expectations for Thursday’s report spanned from withdrawals of 44 Bcf to 68 Bcf. With Thursday’s report, nationwide stocks are expected to fall below 1 trillion cubic feet for the first time since the winter of 2003, when inventories ultimately reached a record low of 642 Bcf by mid-April, according to EIA data.