Market Currents: Biggest oil draw since Britney’s first hit
Friday September 9, 2016
1) Our friends at The Fuse yesterday highlighted how U.S. imports are rebounding from OPEC this year, after dropping sequentially since 2010 with the rise in domestic production:
According to our model, U.S. domestic production peaked in May of last year, and OPEC imports have been on the rise pretty much since. Our ClipperData show U.S. imports from OPEC averaging 3.16mn bpd through August, up 19 percent versus year ago levels.
The U.S. receives oil from eleven OPEC members (none from Indonesia, Iran). While Saudi leads the charge, sending an average of over 1.1 mn bpd so far this year, we have also seen crude arrive from OPEC’s newest member, Gabon, in January of this year (light sweet Rabi to the East Coast).
While Algerian cargoes were sporadic last year, we have seen seven consecutive months of light sweet Saharan Blend deliveries, while a number of deliveries of Libyan Sarir have made their way to Par Petroleum’s Kapolei refinery in Honalulu. While OPEC’s reach continues to be far and wide, it is matched by the U.S. and its appetite for their crude.
2) Tomorrow is September 10th, which marks the peak of hurricane season. As the fire chart below illustrates, we can pretty much rely on there being a named storm in the Atlantic at this time.
Despite last week’s pick up in tropical activity via Hurricane Hermine (and the volatility it has wrought on the oil market), we have once again traversed through a quiet Atlantic hurricane season. This is typified by current conditions; while there are two disturbances currently in the Atlantic, both have low probabilities of development over the next 48 hours. Our named storm looks likely to be errant this year.
