Oil Prices Fall(Surprise inventory build)

money.cnn.com ^ | staff

[kellynla]

Oil prices fall on surprise inventory build. Gasoline inventories rise 2.1 million barrels. Crude oil stocks up 1.7 million barrels.

[mnehring]

but for oil companies to realize double-digit percentage increases in profits at the same time ...

Actually, you may want to check XOMs earnings (for example). Most of their earnings came from upstream international operations. Their upstream US revenue was down and their downstream US revenue was almost flat. Basically, no matter what the critics charge, the increase in gas prices in the US has not resulted in in creased profits for 'big oil'. http://www.freerepublic.com/focus/f-news/1622599/posts

[dirtboy]

You seem to be confusing gasoline and oil costs in most of your arguments.

I am not even discussing costs here. I'm discussing inventory. Once again, please come up with a rational explanation of how the analysts can be so far off as to inventory levels for gasoline in the course of one week.

[Wristpin]

The other day Crude prices spiked due on the news of an Italian refinery fire. A reduction of refining capacity should increase supply of crude yet prices went up.

I have no doubt the shadowy futures traders are manipulating the market.

[jec41]

You still have not answered the underlying issue here - why did gasoline inventories RISE 2.1 million barrels when analysts thought they would DECLINE 700,000 barrels? That's means the analysts were 2.8 MILLION BARRELLS off in their estimates - or about 33 percent of daily gasoline consumption. In other words, over the course of one week, refineries would have to have produced about five percent more gasoline each day than was being used - not the indication of a tight market like we saw with Katrina.

IMO someone has been underreporting inventories to help jack up the futures market.

Actually it may simply be that people bought less and inventory increased. In other words demand was less and supplies increased,

[groanup]

Once again, the analysts have that history to factor into their projections. Why where they off 2.8 million barrels in one week?

Very often the inventories reports can cause big swings in the crude pits, especially if there are big longs or shorts and the reports go contrary.

If these analysts could accurately predict these inventory reports then they wouldn't need to share their predictions with their clients. They would just trade oil futures from their yachts.

[Grampa Dave]

"Once again, the analysts have that history to factor into their projections. Why where they off 2.8 million barrels in one week?"


I know an old style democrat, he proudly served in the military and supports our troops in Iraq.

When the first of these March/April shortages in 2001 in W's first year shot gasoline prices up, and everyone was hollering for GW's head across the nation and here on FR.

He said we need to investigate the analysts of the oil industry, the hedge funds and others who trigger these price increases. He still feels this way with this current situation.

[Rutles4Ever]

Maybe you haven't heard, but oil futures trade on the "future", not the present. Inventories may have been unexpectedly high, but you seem to forget that there's a little thing called "hurricane season" just around the corner, and all indications are that it will be as-active (if not more active) than last year.

Also, oil prices are contingent on world consumption, not just U.S. inventories. Worldwide demand is growing at a pace that will outstrip conservation efforts here anyhow, so why would do you suspect manipulation based on inventory data in America?

[dirtboy]

Actually it may simply be that people bought less and inventory increased. In other words demand was less and supplies increased

For that to be true, demand would have had to have dropped suddenly, in the course of one week, an average of five percent a day, with no warning from previous weeks that such was going to happen, in order to blindside the analysts.

[dirtboy]

He said we need to investigate the analysts of the oil industry, the hedge funds and others who trigger these price increases.

And that in turn would be market manipulation. I doubt the likes of Exxon would attempt such - everyone keeps too close an eye on what Exxon is doing. IMO the flow of information is being manipulated.

[kellynla]

thank you :-]

Energy Prices

PETROLEUM ($/bbl)
PRICE* CHANGE % CHANGE TIME
Nymex Crude Future 73.65 -.96 -1.29 10:53
IPE Crude Future 73.58 -1.06 -1.42 11:13
Dated Brent Spot 73.47 -1.11 -1.49 11:24
WTI Cushing Spot 74.40 -.21 -.28 10:05

[Grampa Dave]

"Don't you find it somewhat strange that the USEPA required changeover effects gas prices around the globe?"

I don't know enough about the interdependence of the other countries to our supply and demand situations. Having said that, the hedge fund kings like $oreA$$ are global. Besides making huge windfalls for his hedge funds, $oreA$$ and his paid minions in America get to blame GW for the price increase.

[dirtboy]

Maybe you haven't heard, but oil futures trade on the "future", not the present.

I am not talking futures. I am not talking prices. I am talking an unexpected, sizeable rise in gasoline inventories in the week just transpired.

[webheart]

the Energy Information Administration

I never heard of this agency before. Another vital government service, I am sure.

[Grampa Dave]

Thanks for posting this little tidbit. Most of us were not aware of this factor.

Once again, refineries had to have produced five percent more gasoline every day last week than motorists were using. That is a large swing in one week.

[antaresequity]

We at the crest everyone. Relax.

One more push up to test 80 then she will do her pull back thingy... 80 80 80 80 80 80 .....[greed]

[mnehring]

I think your perspective on oil inventory is off.. 2.1 million barrels sounds like a lot to be off in a week (and of course, the media plays this up like it is a huge difference), but considering our weekly stock is over 300 million barrels, you are talking about far less than 1% difference.

[Grampa Dave]

Bray has a good "Braying" thread on the history of oil prices. Readers of this thread might want to visit Bray's thread and comment.

http://www.freerepublic.com/focus/news/1625932/posts

[Realism]

I have no doubt the shadowy futures traders are manipulating the market.

You mean like taking all those profits and sinking it into futures, which would, well, generate more profits on both ends. I'm in the wrong business..

[Rutles4Ever]

This is typically the time of year when suppliers try to unload their winter-blend stocks, which I believe is what caused this blip. On a week-to-week basis, it could easily be mis-forecasted by analysts when the greatest spike in the winter-grade fuel dump will occur.

In a couple of weeks, ethanol blends will re-clamp the vice on the supply line.

It's not a conspiracy. Trust me.

[thackney]

I thought there was a severe SHORTAGE of gasoline.

This chart has not been updated from last week. But this is a 1% rise in stocks, when stocks are 5% lower than they should be. It is a good sign that they have started to recover from the EPA mandated changes in the fuel mixtures. But stocks are still lower than they should be this time of year.