Fundamental Friday: 6 May 2016

Crude oil: Crude oil production falls at an even faster pace this past week. Down 113,000 b/d from the week before, the EIA estimates have extraction rate estimated at 8.825 million. This single week alone tops all of the losses in the last three weeks. Stocks continued to grow, though, and even picked up pace. A gain of 2.8 million barrels brought total crude stocks to 1.238 billion barrels.

Refinery statistics remained relatively flat throughout the week. Inputs jumped just 139,000 b/d to 15.986 million b/d, a level consistent with the monthly average. Utilization jumped in conjunction with inputs. Up 1.6 percent, capacity was measured at 89.7 percent total, higher than the past three estimates.

Natural gas: Natural gas fundamentals continue to get more and more bullish as the weather warms. Underground stocks grew by 68 bcf to 225 bcf total. The accelerated trend is only topped by last weeks growth which combines for a 140 bcf growth over the last two weeks. Natural gas rigs dropped by just one to a total of 86 operating. Once again, lagging demand appears to have the largest effect on fundamentals.

Bentek energy reports a 0.7% supply change and a 4.6% demand change for this week. These estimates tend to fluctuate representing the volatility taking over the market. Natural gas rigs continue to remain representing about 20% of the total operational rigs. Producers seem unwilling to reduce the pressure on the market, unlike the crude oil market which is seeing large declines in output.

Gasoline: Gasoline data remained relatively flat this week. Finished gasoline stocks grew by 464,000 barrels to 24.876 million barrels this past week. Component stocks grew slightly as well up 71,000 barrels to 216.919 million barrels a sign that refinery capacity remains level from last week. Finished gasoline production jumped to the highest levels in six weeks. Gains of 304,000 b/d brought total output for the week to 9.811 million b/d. Product supplied jumped to a six-week high as well up 414,000 b/d to 20.242 million b/d.

Gas prices continue to rise. Average regular price grew across the board to $2.240 up $0.078 from last week. The gains were double what they were last weekend. Average diesel price jumped $0.068 to $2.266. The gap continues to close between the two prices as diesel prices show faster growth.


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