Connect with us

Hi, what are you looking for?

The Smart Citizen Report

BREAKING NEWS

Oil Rebounds after Early Drop on U.S. Production Mark-Up

imageCommodities21 minutes ago (Mar 10, 2021 02:19PM ET)

(C) Reuters.

By Liz Moyer and Barani Krishnan

Investing.com — Oil prices rebounded on Wednesday after falling earlier on government data indicating that output was recovering faster than refining after last month’s storm-related outages in Texas, the epicenter of U.S. energy production.

Futures of New York-traded West Texas Intermediate, the benchmark for U.S. crude, initially fell on the Energy Information Administration’s petroleum supply-demand report for the week ended March 5. WTI had closed down in two previous sessions.

But as Wednesday’s trading progressed, the U.S. crude benchmark rose, trading at $64.48 per barrel by 2:14 PM ET (18:14 GMT). That was up 47 cents, or 0.7% on the day. WTI hit an intraday low of $63.14 earlier.

London-traded Brent, the global benchmark for crude, was at $67.98, up 46 cents, or 0.7% as well. Brent’s intraday low was $66.52.

The EIA estimated U.S. crude production at 10.9 million barrels per day for the week ended March 5, up from 10 million bpd estimated for the week ended Feb. 26.

The agency also revised upwards refining activity to 69% of capacity at the end of last week, versus the previous week’s record low of 56%.

But the production estimate seemed to grab the market’s attention more, helped by another outsized build in crude stockpiles that came after the previous week’s monster pile-up in crude inventories caused by the mid-February Texas storm.

Crude inventories rose 13.798 million barrels last week, compared with analysts’ expectations for a build of 816,000. The prior week’s build was 21.5 million barrels, even higher than the 19.2 million-barrel increase seen during the week to April 10, 2020, when demand for oil cratered amid the COVID-19 outbreak.

“The production number is important because when you take the additional 900,000 barrels per day in the EIA’s mark-up and multiply that over the seven days of the week, you get another 6.3 million barrels in theory,” said John Kilduff, partner at New York energy hedge fund Again Capital.

“Put that higher production estimate next to the crude build itself that came in at 13 million barrels more than thought, and you’re certainly going to get some raised eyebrows. But to be fair to the EIA, they also reported bigger drawdowns than anticipated in fuel. That’s what’s helping to limit the market’s downside.”

The EIA said gasoline inventories fell 11.869 million barrels last week the EIA said, compared with expectations for a 3.47 million-barrel draw.

Distillate stockpiles, which include diesel and heating oil, fell 5.5 million barrels against expectations for a draw of 3.53 million barrels, the EIA data showed.

The sharper-than-expected fuel drawdowns came after refinery crude runs rose 2.4 million barrels last week. The weekly refinery utilization improved by 13%, going from 56% of operable capacity to 69%.

Typically known for its sweltering weather most of the year, Texas initially looked like a white blanket after the Arctic blast that hit on Feb. 17.

While the “Lone Star State” is known for maintaining temperatures of between 60?F (15.6?C) and 70?F (21.1?C), the deep-freeze that enveloped Texas after this year’s winter storms was so bad that oil and gas couldn’t flow like normal in several of its key production basins.

“Infrastructure in Texas, such as wellheads, gathering lines, and processing facilities, are more susceptible to the effects of extremely cold weather,” the EIA said in its Short Term Energy Outlook report for March, released Tuesday.

Following repairs to the Texas infrastructure and resumption of normal weather, U.S. production for March was expected to return to 11 million bpd, the agency added in the STEO report.

Oil Rebounds after Early Drop on U.S. Production Mark-Up

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Join Our Time-Limited Free Subscription! Get Latest Trading Ideas, Business Info and Market Stocks.

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!

You May Also Like

Editor's Pick

 Going Full Liberal In response to the arrest of a man who walked into a cafe holding a baseball bat and screaming through a megaphone, a...

Editor's Pick

Going Full Liberal The liberal plan?  Get the body count as high as possible to hurt Trump.  These people are disgusting. Last week, the...

Editor's Pick

Going Full Liberal More trouble for creepy Joe. An extensive new survey by Morning Consult of nearly 28,000 registered voters presents some troubling numbers for the...

Editor's Pick

Going Full Liberal Liberal brilliance on full display. New York City appears to have experienced a surge in shootings this week after the New...

Editor's Pick

Going Full Liberal In the past few weeks, demonstrators — mobs, really — have destroyed or defaced the following statues across the United States....

Editor's Pick

Going Full Liberal The Justice Department released Peter Strzok notes from 1/4/2017 regarding the Flynn-Kislyak calls. Last month it was revealed 2020 Democrat presidential...

Editor's Pick

Going Full Liberal National Public Radio (NPR) posted a tweet Saturday urging every reader to begin “decolonizing your bookshelf.” According to NPR, “white voices...

BREAKING NEWS

Crude oil prices plunged sharply on Thursday, extending losses to a fifth session, amid concerns about the outlook for energy demand. The coronavirus has...

Disclaimer: TheSmartCitizenReport.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice.

The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

© Copyright 2021,TheSmartCitizenReport.com All Rights Reserved