Malcolm Graham-Wood
Independent Analyst
After yesterday’s paucity of company news, forcing an oil price only blog, today the tables are turned, there is oil price news but companies are doing all sorts of stuff today.
The vampire squid poured cold water on the crude price yesterday, the recent substantial rise is clearly not what G Sachs thought when it predicted $20 oil. It was sort of inevitable, the fall that is, not the lousy forecast and is what they say ‘makes a market’. Weak Chinese trade data also punished oil bulls who had got Brent up to $41.48 during the day. After the close the API stats showed a stock build of 4.4m barrels just north of the guess of 3.9m for tonight’s EIA numbers. Kuwait added to the gloom by saying that whilst it was happy to freeze production that it would only do so if everybody else did, and they mean Iran…
The EIA also published its STEO in full which was like the curates egg, demand forecasts were lowered again but so was production. US production this year is now expected to be 8.7m b/d falling to 8.2m b/d next year, this compares with 9.4m b/d in 2015. For Natural gas geeks there were many figures to absorb, current inventories are 46% higher than this time last year and at the end of the season (Match 31st) will be 54% above last year. Their Henry Hub forecasts are $2.25 for this year and $3.02 for next which might cheer people up as will another stat which shows that this year 33% of all electricity generation in the US will be gas fired, the first time ever that it overtakes coal, stuck on 32%.
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