Petroleum March News

The glut of U.S. crude oil inventories has largely dissipated since inventories are now only +1.3% above the 5-year seasonal average, the tightest such level in 3-1/2 years. Meanwhile, gasoline inventories are only +3.9% above average and distillate inventories are +0.2% above average. Meanwhile, U.S. crude oil production in last week’s EIA report rose by +0.8% w/w to post a new record high of 10.369 million bpd.
Oil futures halted losses near $61/Bbl as investors weighed a potential increase in geopolitical tensions during the fallout from the sudden firing of U.S. Secretary of State Rex Tillerson. Prices seesawed after President Donald Trump ousted Tillerson, whom he had disagreements with over key issues, including OPEC member Iran. The move could have implications for U.S. sanctions on Iran, which could impact the latter’s oil industry and exports, Facts Global Energy and Royal Bank of Canada warned.
The number of active oil and gas rigs decreased this week, according to Baker Hughes data, by a single rig. This brings the total number of oil and gas rigs to 946, which is an addition of 217 rigs year over year.
Still the number of oil rigs in the United States rose this week, by 6, with the number of gas rigs decreasing by 7. The number of oil rigs stands at 765 versus 586 a year ago. The number of gas rigs in the U.S. now stands at 181, up from 145 a year ago.
At 12:14pm EST, the price of a WTI barrel was trading down $1.02 (-1.55 percent) to $64.78—almost $1.00 under this same time last week. The Brent barrel trading down $1.51 (-2.17 percent) to $68.14, almost $2 per barrel under last week. While inventory figures and OPEC data are the usual catalyst for oil price swings, this week the stronger dollar has pushed oil prices downward in what is one of the biggest weekly drops in months.
U.S. crude oil production rose again, to 9.919 million bpd, from 9.878 million bpd the week before, setting another new high and getting dangerously close to that psychologically important 10.0 million bpd mark.
Canada has added hundred of rigs in the last three weeks. This week, Canada added another 14 oil rigs, but the number of gas rigs in Canada declined by 10. The total number of oil and gas rigs is now 342, with the number of gas rigs still down year over year.