Not Logged In Log In   Sign Up   Points Leaders
Follow Us    5:42 PM

Message Forum - Read Message

Category: GasBuddy Official Blog > Topics Add to favorite topics   Post new topicPost New Topic
Author Topic: Refineries ramp up production, leads to massive decline in crude inventories Back to Topics
PD

Moderator
Message Posted: Jul 3, 2013 10:42:10 AM

The Energy Information Administration released its weekly report on the status of petroleum inventories in the United States today.

Here are some highlights:

CRUDE INVENTORIES:
Crude oil inventories decreased by 10.3 million barrels to a total of 383.8 million barrels. At 383.8 million barrels, inventories are 0.9 million barrels above last year (0.2%) and are above the upper limit of the average range.

GASOLINE INVENTORIES:
Gasoline inventories decreased by 1.7 million barrels to 223.7 million barrels. At 223.7 million barrels, inventories are up 18.7 million barrels, or 9.1% more than last year. Here's how individual regions and their gasoline inventory fared last week: East Coast (-0.8mb); Midwest...

Visit GasBuddy Blog for full article
REPLIES (newest first) Post a Reply
Profile Pic
kiatoindos
Champion Author Chicago

Posts:2,245
Points:518,700
Joined:Dec 2012
Message Posted: Jul 10, 2013 7:23:30 AM

First not enough refining capacity now not enough oil more B.S.to get prices up!!!!
Profile Pic
cobey24
Sophomore Author New York

Posts:243
Points:35,630
Joined:Apr 2008
Message Posted: Jul 8, 2013 7:50:23 PM

Cut/Past from the OPEC World Oil Report. It is online and published by OPEC themselves. Even THEY know what Wall Street is up to!!! If you have ever questioned WHY energy prices are what they are today,,, this will answer your questions and leave little doubt. Its not politics, its EXTORTION right in our own back yard! Chapter
1

Regulatory reform: swap derivatives market beginning to take shape
Since the emergence of oil as an asset class in 2005, speculative activities on the financial markets have become a key factor behind the increased volatility of crude oil prices. The resulting influence of excessive speculation has, at times,decoupled price movements from fundamentals and thus sent confusing signals to the market.
Policymakers at the highest levels have recognized the need for oversight and regulation in the financial derivatives markets. This includes the organized futures exchanges, such as the New York Mercantile Exchange (Nymex) and the
Intercontinental Exchange (ICE), as well as the over-the-counter (OTC) derivatives markets. The previously unregulated OTC derivative market is receiving particular attention.
The OTC market is massive and includes not only commodity derivatives,
but also foreign exchange, interest rate and equity-linked derivatives, as well as credit default swaps. At end-2011, the total amounts outstanding amounted to $648 trillion. Oil-based derivatives represent only a tiny fraction of the overall OTC market - less than 1% in terms of outstanding amounts. However, relative to the crude futures market, the swaps market for oil is considerably larger.
As in other commodity markets, swaps are used in the crude oil market to hedge against price risk. The buyer of the crude swap contract typically pays to guarantee a fixed price for either the buying or selling of crude, while the seller of the contract assumes exposure to the future price risk at the expiration of the contract by agreeing to make up the eventual difference, if any. If, however, the market moves in the other direction, the seller keeps both the resulting profits and the fee for writing the contract.
There are two distinct yet interrelated sets of drivers behind on-going efforts to strengthen regulation and oversight in the financial markets. The first are regulatory initiatives to address commodity price volatility, particularly high oil prices.The second are initiatives aimed at addressing the considerable shortcomings of the existing regulatory framework as revealed by the 2007/2008 financial crisis.
Before 2006, regulators had almost no information about activities on the swap derivatives market. Data from the Bank of International Settlements was of limited use as it was only provided twice-yearly and with a considerable time lag. It also had little disaggregation.
During the 2007/2008 oil price spike, it became clear to policymakers that in order to understand the factors driving oil prices, it was necessary to know what was going on in the swap derivatives market. Regulators were also concerned that the lack of oversight in the swaps market could allow market manipulation and a distortion of the price discovery process. This led to a push on the commodity side for improved transparency and oversight.
On the financial side, the risks associated with widespread ignorance about swaps activities were even more dramatically illustrated during the financial crisis with the near-bankruptcy of insurance giant AIG. A division of the company had been a major seller of credit default swaps in the OTC market. When the downturn in the US housing market led to widespread defaults, the insurer’s collateral obligations
and debt losses mounted, and the US government was forced to step in with a
massive $182 billion taxpayer-funded bail-out to prevent AIG’s collapse. Therefore, another central driver behind efforts to regulate the swaps market is to prevent a repeat of a systemic, AIG-like event.
At their Pittsburgh Summit in 2009, the G-20 industrialized and emerging economies committed to implement reforms in the OTC derivatives markets. The Pittsburgh Communiqué3 states that “all standardized OTC derivative contracts should
be traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties by end-2012 at the latest.” G-20 leaders further agreed that all OTC derivative contracts would be reported to trade repositories,which would allow the data to be made available to regulators for oversight,as well as released in aggregate form to the general public, similar to the existing reports on trader’s activities issued by the US Commodity Futures Trading Commission(CFTC).
In response to these commitments, regulators in the world’s derivatives trading centres have been busy establishing the necessary rules and guidelines to facilitate the shift in swaps trading from private, bilaterally-negotiated deals to standardized agreements executed on electronic platforms, with established clearing houses and trade repositories.
Extending regulation and oversight to the swaps market is likely to impact the commodity markets in two ways: enhancing transparency and increasing costs for speculative activity.
With regard to transparency, for the first time, regulators will have detailed data on the activities of financial firms in the swap derivatives market for oil.
For example, the large financial firms active in swaps trading will be required to maintain a daily record of swaps, as well as a complete audit trail, to allow for a reconstruction of any trades.
Such data will give regulators the necessary tools to pursue cases of suspected market manipulation. Moreover, since it is planned that some of this data will be published in‘commitment of trading’ reports similar to those published for the futures exchanges,the market as a whole will have a more complete picture of swaps activities in the oil market and, thus, a better understanding of the factors driving crude oil prices.
In terms of speculative costs, increased capital and margin requirements will make speculative activities more expensive. In addition to other costs associated with investing in commodity markets, this could diminish some of the attractiveness of commodities as an asset class (relative to other asset classes) and it could thereby dampen some speculative inflows. Some critics of the new regulatory push warn that this would lead to lower liquidity and therefore unintentionally push up hedging costs.
It bears remembering that the development of a spot market for crude oil and products historically led to increased volatility. This, in turn, increased the need for financial instruments to hedge against the resulting price risk. Combined with financial deregulation and the emergence of oil as an asset class, the sharp increase in investment flows into commodity derivatives markets further exacerbated oil price volatility.
The current push to strengthen the regulation and oversight of the paper markets is, therefore, a clear recognition of the harmful impact that excessive speculation can have on stability in the commodity markets, including oil. Regulators are working at both national and international levels to put these new rules in place by the end of 2012. However, given the evolving developments in investment flows, regulation and the continued role of oil as an asset class, the impact of financial markets on the oil price is likely to remain a key uncertainty in the years ahead.
Profile Pic
honda0105
Champion Author Tallahassee

Posts:22,919
Points:2,212,065
Joined:Nov 2008
Message Posted: Jul 7, 2013 6:49:14 AM

I understand "massive" to mean a bit more than a percent or two. Massive is more like 20% and even the 9.1% is not that big, since last year is done 'n gone... trends in inventories now are more important, if any...
Profile Pic
LJGP_MO95
Champion Author Missouri

Posts:2,585
Points:643,865
Joined:Jun 2005
Message Posted: Jul 6, 2013 8:39:01 AM

Don't believe it
Profile Pic
honda0105
Champion Author Tallahassee

Posts:22,919
Points:2,212,065
Joined:Nov 2008
Message Posted: Jul 6, 2013 7:54:30 AM

moen: you got that right.
Profile Pic
DanMtz
Champion Author Oakland

Posts:5,943
Points:1,844,540
Joined:Oct 2009
Message Posted: Jul 4, 2013 10:27:13 AM

That will be temporary, for sure.
Profile Pic
bston
Champion Author Oklahoma City

Posts:4,356
Points:1,242,525
Joined:Mar 2011
Message Posted: Jul 4, 2013 9:45:23 AM

No worry; there's more to be had underground.
Profile Pic
kyjlh
Champion Author Kentucky

Posts:3,776
Points:1,100,650
Joined:Feb 2005
Message Posted: Jul 4, 2013 9:25:54 AM

ok
Profile Pic
speedys
Champion Author Utah

Posts:9,588
Points:3,159,930
Joined:Nov 2005
Message Posted: Jul 4, 2013 6:05:37 AM

The holiday increased prices.
Profile Pic
ponyNJ
Champion Author New Jersey

Posts:1,266
Points:1,186,470
Joined:Apr 2008
Message Posted: Jul 4, 2013 6:04:11 AM

Doesn't sound like either inventory level should set off any alarms.
Profile Pic
Stos1946
Rookie Author Atlanta

Posts:75
Points:712,705
Joined:Dec 2011
Message Posted: Jul 4, 2013 6:02:11 AM

Got in on a promotion at BJ's yesterday and filled up for $2.50/gallon.
Profile Pic
cheapertvs
Champion Author Richmond

Posts:12,968
Points:3,343,920
Joined:Jan 2004
Message Posted: Jul 4, 2013 6:00:44 AM

We could use some of those massive declines at the pump here in Virginia.
Profile Pic
getalong
Champion Author California

Posts:2,407
Points:431,405
Joined:Aug 2007
Message Posted: Jul 4, 2013 5:58:29 AM

just collecting points
Profile Pic
tco0102
Champion Author Charleston

Posts:10,120
Points:2,352,000
Joined:May 2007
Message Posted: Jul 4, 2013 5:57:55 AM

interesting.
Profile Pic
mygaz
All-Star Author Illinois

Posts:995
Points:836,260
Joined:Sep 2005
Message Posted: Jul 4, 2013 5:57:06 AM

Good news..Happy Fourth!!
Profile Pic
Luckylindy
Champion Author Milwaukee

Posts:6,816
Points:1,699,895
Joined:May 2008
Message Posted: Jul 4, 2013 5:56:42 AM

Just when I thought we were going to get a break. Guess not.
Profile Pic
livedream
Champion Author Michigan

Posts:6,459
Points:1,353,445
Joined:Mar 2011
Message Posted: Jul 4, 2013 5:56:24 AM

Gas prices jumped up here .20 cents two days ago. No change since then.
Profile Pic
bassakwards007
Champion Author Orange County

Posts:3,659
Points:842,600
Joined:Aug 2012
Message Posted: Jul 4, 2013 5:55:29 AM

It will go up regardless of what they say.
Profile Pic
WilW
Champion Author Atlanta

Posts:13,718
Points:3,124,035
Joined:Aug 2004
Message Posted: Jul 4, 2013 5:54:12 AM

Old news, but still, GOOD FOR POINTS!!
Profile Pic
drawee
Champion Author Texas

Posts:4,883
Points:1,042,150
Joined:Feb 2012
Message Posted: Jul 4, 2013 5:52:50 AM

old news
Profile Pic
jeff95519
Champion Author California

Posts:4,981
Points:1,953,070
Joined:Sep 2008
Message Posted: Jul 4, 2013 5:51:37 AM

don't think so
Profile Pic
gaspumpin
Champion Author Indiana

Posts:3,930
Points:982,000
Joined:Apr 2012
Message Posted: Jul 4, 2013 5:51:10 AM

Need a pipeline to get the crude to the refineries!!!
Profile Pic
Petrock
Champion Author Lexington

Posts:11,723
Points:3,159,960
Joined:Apr 2005
Message Posted: Jul 4, 2013 5:50:02 AM

So when the new refinery units come online, instead of a drop in gas prices they notice a drop in crude oil inventories. And this leads to an increase in gas prices! Twenty cents a gallon around here yesterday!
Profile Pic
Foxt
Champion Author Minnesota

Posts:7,798
Points:2,615,430
Joined:Jul 2006
Message Posted: Jul 4, 2013 5:49:40 AM

Didn't make a difference, if anything prices went up.
Profile Pic
2parrots
Champion Author Massachusetts

Posts:4,324
Points:947,210
Joined:May 2012
Message Posted: Jul 4, 2013 5:49:30 AM

WOW , Increased production & higher prices at the same time .Happy 4th of July to all Gas Buddies & their families.
Profile Pic
djp071158
Champion Author Detroit

Posts:3,170
Points:884,100
Joined:May 2012
Message Posted: Jul 4, 2013 5:43:28 AM

And since today is a holiday (Happy Birthday, America), gas prices went up 25 cents a gallon Tuesday. For no other reason, than this is a holiday.
Profile Pic
pepinoNC
Champion Author Raleigh

Posts:4,774
Points:1,252,495
Joined:May 2011
Message Posted: Jul 4, 2013 5:42:48 AM

Another massive conspiracy.
Profile Pic
raccoon2011
Champion Author Massachusetts

Posts:3,989
Points:948,715
Joined:Aug 2011
Message Posted: Jul 4, 2013 5:36:50 AM

ok
Profile Pic
smqua
Champion Author Cleveland

Posts:2,627
Points:1,030,955
Joined:Mar 2011
Message Posted: Jul 4, 2013 5:34:39 AM

Duh
Profile Pic
mark1962
Champion Author Albany

Posts:8,258
Points:1,849,315
Joined:Sep 2009
Message Posted: Jul 4, 2013 5:33:46 AM

Good
Profile Pic
floridakeys
Champion Author Columbus

Posts:1,051
Points:370,855
Joined:Jan 2011
Message Posted: Jul 4, 2013 5:33:40 AM

Just playing with numbers seems to me .
Profile Pic
w4kh
Champion Author Tennessee

Posts:14,258
Points:2,829,740
Joined:May 2004
Message Posted: Jul 4, 2013 5:33:07 AM

Somehow I do NOT see a 2.6% decrease in inventories as "massive", nor would I consider a 7/10 of 1% change in gasoline inventory sdomething that is newsworthy... the use of a pejorative term like "massive" is speculator talk for "get ready to be screwed at the pump"
Profile Pic
billy44bo
Champion Author Mobile

Posts:9,662
Points:2,083,460
Joined:Feb 2008
Message Posted: Jul 4, 2013 5:28:25 AM

Greed runs the oil market and this is nothing more than a numbers game to try to hide there greed.
Profile Pic
hockey_24
Champion Author KW

Posts:2,370
Points:520,405
Joined:Oct 2012
Message Posted: Jul 4, 2013 5:28:12 AM

no change at pumps..so ...?
Profile Pic
LeeFree
Champion Author Pittsburgh

Posts:11,698
Points:2,836,425
Joined:Jun 2005
Message Posted: Jul 4, 2013 5:21:53 AM

Pump prices actually went down here this week. But with crude oil going over $100/bbl yesterday that will not last for long.
Profile Pic
wkb03
Champion Author Georgia

Posts:3,272
Points:1,000,000
Joined:Aug 2011
Message Posted: Jul 4, 2013 5:18:24 AM

Just a numbers game...
Profile Pic
moenkopi23
Champion Author Chicago

Posts:3,460
Points:867,205
Joined:Jul 2011
Message Posted: Jul 4, 2013 5:16:28 AM

As always, Big Oil is playing with the numbers and rigging the game at the detriment to the consumer.
Profile Pic
oweno1
Champion Author San Diego

Posts:3,107
Points:690,960
Joined:Nov 2012
Message Posted: Jul 4, 2013 5:14:31 AM

bodes poorly for the cinsumer
Profile Pic
jcdakota
Champion Author Baltimore

Posts:1,618
Points:415,920
Joined:Nov 2010
Message Posted: Jul 4, 2013 5:08:56 AM

Gas production is up but prixes are not going down very fast.
Profile Pic
turbodog
Champion Author Mississippi

Posts:9,332
Points:1,960,515
Joined:Feb 2009
Message Posted: Jul 4, 2013 5:03:37 AM

Summer coming
Profile Pic
friday21
Champion Author Toronto

Posts:9,108
Points:1,232,920
Joined:Jul 2010
Message Posted: Jul 4, 2013 5:02:04 AM

Whatever
Profile Pic
ovillaone
Champion Author Dallas

Posts:4,239
Points:778,300
Joined:Nov 2012
Message Posted: Jul 4, 2013 5:00:53 AM

and back come the increases
Profile Pic
twt
Champion Author Virginia Beach

Posts:12,831
Points:1,584,310
Joined:Mar 2005
Message Posted: Jul 4, 2013 4:59:29 AM

Gee, I wonder why. Big money and crooked politicians.
Profile Pic
Leamer
Champion Author Ontario

Posts:1,059
Points:288,805
Joined:Sep 2005
Message Posted: Jul 4, 2013 4:55:45 AM

nice
Profile Pic
johnpuh
Champion Author Ohio

Posts:2,260
Points:762,075
Joined:Sep 2012
Message Posted: Jul 4, 2013 4:54:32 AM

Prices jumped here an averave of 36¢ a gallon right before the holiday. Imagine that!
Profile Pic
DrivingFool2
Champion Author Appleton

Posts:11,236
Points:2,198,760
Joined:Apr 2005
Message Posted: Jul 4, 2013 4:51:35 AM

manipulation at work
Profile Pic
robmschn
Veteran Author Oklahoma

Posts:250
Points:65,200
Joined:May 2013
Message Posted: Jul 4, 2013 4:51:31 AM

Ah! So that's why crude oil is rising at the same time gasoline is falling!
Profile Pic
duane7810
Champion Author Illinois

Posts:2,764
Points:747,010
Joined:Dec 2010
Message Posted: Jul 4, 2013 4:43:50 AM

Gas is "only" slightly over $3.00 in Normal, IL.
Profile Pic
Beau2140
Champion Author New York

Posts:10,811
Points:2,244,110
Joined:Oct 2008
Message Posted: Jul 4, 2013 4:43:43 AM

And up goes the price again.
Profile Pic
Gil43
Champion Author Florida

Posts:2,576
Points:630,485
Joined:Mar 2013
Message Posted: Jul 4, 2013 4:42:03 AM

there goes any decline in prices
Post a reply Back to Topics