The En-Pro Blog

This is especially the case when we are asked to forecast short and long term prices for crude oil and transportation fuels.

Do the U.S. inventory and demand numbers shown above impact on these prices? The answer used to be “Yes” but now the answer is, “Well sort of.”

The problem is twofold; the first fold being disagreement by the two reporting entities: the EIA and the industry funded American Petroleum Institute (API).

Last week was a good example of the confusion that numbers can create. On Tuesday, August 17 after the markets closed, the API said that crude oil inventories INCREASED the week ending August 13 by 5.9 million barrels, yet on Wednesday, August 18, the EIA came out with a DECREASE of 0.8 million barrels for the same cutoff date of August 13.

Not a bad discrepancy swing of data (6.7 million barrels) if you don’t mind heights.

By: Roger McKnight, Senior Petroleum Advisor

So what was the net result of this mish mash of data? Find out in this week’s Energy Report. For natural gas, electricity commentary and weekly graphs, send us your email to: info@en-pro.com.

They are all influencing oil prices. Last week, market uncertainty really spooked investors, finally restoring oil back to a realistic and rational price at well below $80 U.S./barrel. As we previously discussed, oil above $80 U.S is a precarious and ludicrous proposition-based on current supply and demand fundamentals. The U.S. Fed chairman stated the obvious last week that the economic recovery will be slower than expected and another bearish U.S. inventory report showed increasing diesel and gasoline inventories with reduced production. As expected, the U.S. oil companies reduced refinery runs to 88.1% from last week’s 91.2% to hold on to their sliding margins. It appears reality has temporally clobbered the traders, fund managers and non-commercial participants (speculators) to other investment avenues for now. The scary part of this whole economic mess is governments have run out of money and new strategies to turn things around.

By: Roger McKnight, Senior Petroleum Advisor

What does the next quarter look like? And how will the hurricane predictions affect the futures markets? Find out in this week’s Energy Report. Sign up by sending your email to: info@en-pro.com.