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Asia Is A Crude Magnet

After a bullish-tilted weekly EIA report, wanton is holding onto gains – and once again bumping a conduct on a tip of a trade range. As OPEC cuts and rising shale continue to do battle, hark, here are 5 things to cruise in oil markets today.

1) With OPEC prolongation cuts kicking in, Asian buyers have been bustling in new months pulling in wanton from serve afield. Although Latin American arrivals so distant this month have been weak, during their lowest gait given final April, we are saying a post of strength in Brazil.

According to a ClipperData, Brazilian wanton exports into Asia rose scarcely 20 percent final year contra 2015. So distant this year, Asian arrivals are adult another 20 percent year to date (to yesterday), with a final 3 months averaging 526,000 bpd. The infancy of this wanton creates a approach to China, though in a final integrate of months, we have seen aloft volumes into India.

2) Arrivals of all wanton grades into Asia this month are stronger than a multiple of your 3 favorite superheroes (mine are Batman, Spiderman and The Flash). They are adult over 1 million barrels per day contra final month, as good as contra Feb final year.

This strength has, not surprisingly, come from a Arab Gulf, amid a final pull of exports forward of OPEC prolongation cuts (hark, over 15 million bpd). They have been assimilated by West Africa, with Angolan deliveries during a top on a records. Even North Africa has got in on a act, with rising Libyan prolongation increasingly streamer to destinations other than Europe:

3) We discussed final month how Brazilian oil prolongation had not been influenced by a cost dump of a final dual and a half years, given a offshore projects take a many longer time to come to fruition. Statoil (NYSE:STO), Shell (RDS.A, RDS.B) and Total (NYSE:TOT) all paid billions given 2013 to benefit entrance to Brazil’s pre-salt offshore fields, and now this investment looks to have paid off.

Brazil’s National Petroleum Agency (ANP) expects prolongation to rise during nearly 4.5 million bpd in 2025, with some-more than half of that entrance from pre-salt formations. As a draft next illustrates, scarcely 1.3 million bpd is already entrance from a region, with a Lula deposition now a largest producing margin during 711,000 bpd. This aloft prolongation is translating into aloft exports, that should crack 1 million bpd in a entrance years.

4) Stat of a day comes around a hybrid of Exxon Mobil (NYSE:XOM) and Twitter. Exxon Mobil has cut a valid pot by a many given during slightest 1999 – some 19 percent – in vast partial due to essay off a 3.5 billion tub Kearl oil sands plan in Canada. The following twitter (h/t @cs_energyintel) succinctly sums this up: “Reserves fell by scarcely 4.8 billion boe btwn YE2015 YE 2016 – that’s a homogeneous of losing an Anadarko, Marathon + Hess.” Yikes.

5) Finally, this week’s EIA register news has bucked a new trend, with 3 title numbers – for crude, gasoline and distillates – all sloping bullish. Another plain dump in refinery runs have total with a miscarry in gasoline throughput to drag gasoline inventories divided from final week’s all-time record of 259 million bbls. If mercantile cuts continue from refiners, we should see bonds following their anniversary trend: lower.

gasoline bonds Feb 2017.jpg

Article source: http://seekingalpha.com/article/4049292-asia-crude-magnet