The Energy Report
After a week in which the oil bears punched through the psychologically important $100- and $90-a-barrel price levels, traders were fixed on this morning's Energy Information Administration (EIA) inventory report.
November crude oil was lower overnight after a better-than-$2-a-barrel bounce in Tuesday's NYMEX floor session as traders lined up in anticipation of a bearish report.
Pre-report estimates called for a build in crude oil stocks of around 1.8 million barrels. Gasoline supplies were expected to increase 800,000 barrels, and distillate inventories, which include heating oil and diesel, were forecast to decline by 500,000 barrels.
When the numbers came out, many traders might have wished they'd gotten into the "Very Bearish" line. U.S. commercial crude oil inventories, it turns out, increased to 302.6 million barrels, a whopping 8.1-million-barrel increase from the previous week, nearly putting oil into seasonal oversupply.
Some intimations of oversupply showed up in yesterday's market. Crude's quarterly backwardation widened to $1.61 a barrel Tuesday, bolstering notions of more-aggressive producer hedging in the back months. The move came on the heels of yesterday's EIA forecast for lower U.S. oil demand in the fourth quarter. Estimates now call for demand to fall to 20.25 million barrels per day (bpd), down 1.6% from year-ago levels. For the full year, the EIA predicts an 830,000-bpd decline to 19.85 million bpd...
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More Off-Base (Way Off-Base) Oil Forecasts
Source: Seeking Alpha, Brad Zigler (10/8/08)
U.S. commercial crude oil inventories, it turns out, increased to 302.6 million barrels, a whopping 8.1-million-barrel increase from the previous week, nearly putting oil into seasonal oversupply.
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