Pre Oil Inventory Report For 23 September

WTI crude futures spiked lower in the European morning, touching on lows USD 71.02/BBL, with price action lacking direction as the USD index pared back overnight losses ahead of today’s FOMC rate decision. At 1231 BST WTI crude futures were down USD 0.32 at USD 71.44/BL.

For information on trading this release see our how to trade the oil inventory release article.

In geopolitical news, state-run Chinese firms are reported to be selling fuel to Iran as US sanctions loom, the move could undermine US pressure on Iran to cease its nuclear programme. Moreover, the Iranian foreign minister told his Japanese counterpart that his nation wants abolition of nuclear weapons.

In global news, China is to setup oil reserves equivalent to 100 days of net imports before 2020 to avoid any supply disruptions, the volume is equal to approximately 349mln barrels based on net imports in 2008. Furthermore, a researcher at the National Development and Reform Commission said that China’s crude oil production may rise to 200mln metric tons by 2010 and 220mln by 2020. Elsewhere, the Sheskharis terminal which ships one-third of Russia’s Urals crude-oil exports has reopened for tanker dockings after strong winds forced a 3-day closure.

In corporate news, Total is to undergo a joint venture with Venezuela on a USD 25bln project to develop an oil field in the Orinoco region. The co. is also said to be teaming up with Petrobras to work on expansion projects in Brazil. Elsewhere, ConocoPhillips has stated that its North Sea J-Block natural gas and oil fields in the UK are offline, the co. declined to comment further. Also, Cnooc is working to restore output at fields in Huizhou after damage was caused by Typhoon Koppu, there are no estimates as to when output will resume.

Yesterday’s API figures were as follows:

US API Crude Oil Inventories (Sep 18) W/W +276K vs. Prev. +631K
US API Gasoline Inventories (Sep 18) W/W +3185K vs. Prev. 1347K
US API Distillate Inventories (Sep 18) W/W -1882K vs. Prev. +5197K
Looking ahead to today’s DOE figures, the current consensus of analyst surveyed by Bloomberg stands at:

DOE US Crude Oil Inventories (Sep 18) W/W Exp. -1400K vs. Prev. -4729K (Range; Low -3560K, High 3500K)
DOE US Gasoline Inventories (Sep 18) W/W Exp. +500K vs. Prev. +547K (Range; Low -1300K, High 2000K)
DOE US Distillate Inventory (Sep 18) W/W Exp. +1450K vs. Prev +2237K (Range; Low -1000K, High 3140K)
DOE US Refinery Utilisation (Sep 18) W/W Exp. -1.00% vs. Prev. -0.26% (Range; Low -1.80%, High 0.50%)
The latest Weather Derivatives forecast sees temperatures for the next 6-10 days in the U.S. to be 1.3F above the average for this time of year. The National Hurricane Centre reports that tropical storm Nora, located 645 miles southwest of the southern tip of Baja California is moving towards the northwest at 8mph with winds 40mph sustained winds. Additional strengthening is forecast over the next 24-36 hours.

Sources: BBG, RTRS, NHC, Weather Derivatives

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