After that all eyes were set to the main changes and decisions that took place in the US (including the quantitative easing decision by the Federal Reserve which I have elaborated herein, and the mid term elections for the house of representatives), the crude oil price has started to settle and the hype around it begins to fadeout as oil prices suffer a small decline today:
Prices
Crude oil price (December 2010 future) , as of 16.09PM GMT, on the New York Mercantile Exchange (Nymex), is at 86.24 USD per barrel, which represents a 0.25 dollar drop or a 0.29% decline.
The WTI spot price settled yesterday at the closing of the trade at 86.25 USD per barrel, a decrease of 0.28% compare to the previous day’s rate as of 16.07PM GMT.
The ICE Brent crude oil futures for December 2010 reached 87.63 USD per barrel – a 0.42 percent decrease as of 16.09PM GMT.
The natural gas spot price also rallied a bit after it dropped yesterday and is now being traded, as of 16.08PM GMT, the Nymex Henry Hub Future price for December 2010 is at 3.86$ MMBTU(one million BTU) which is a 0.05% increase.
Quantities
Yesterday the EIA (The US Energy Information Administration) published its weekly report for the preceding week ending on November 2nd about, among other, the petroleum stocks and energy productions in the US. According to the report, as in last week’s report, there a continues reduction in the Finished Motor Gasoline stock that reached its lowest level since the EIA started to report about this figure back in January 1990, and is now at 70,508 thousands of barrels – thus we might not run to our nearest gas station to stock up on it…
This low level reached rock bottom mainly due to the lower refinery output coming from Canada and Europe, but also in the US. As you may recall there was a strike in France which held back major refineries from producing crude oil into gasoline. On the other hand, the crude oil stock in the US is at its highest level since the EIA started to collect data on this figure – 1982, and is currently standing at 1,094 million barrels. This means that there is more of a refinery problem then lack of actual crude oil.
According to the EIA report, this refinery problem is resolved as the strikes in France faded out on the one hand, and the refineries in Canada and USA plan on getting back to their normal level of production in the beginning of November, on the other. Thus it seems that there is more of a labor problem in converting crude oil into gasoline then actual lack of crude oil. Not to belittle the problem, I’m trying to show that we are dealing with a different problem which might be a moot case if the EIA predictions are correct.