A Fundamental Look At US Crude Oil On The Week

A Fundamental Look At US Crude Oil On The Week

$USO, $OIH,, $XOM. $CVX,

On the production front

The EIA’s drilling productivity report was released earlier this week and forecast that production in the major Crude Oil and Nat Gas regions of the Lower US 48 will drop by 93,000 bbl M-M in November.

New-well production per rig continues to rise in all major plays, as legacy well production drops.

In the Eagle Ford new well production per rig is up just under 200 BPD and legacy production is down just over 25,000 BPD. Estimating a new well total of 50, that’s roughly 10,000 BPD more, so the decline is really 15,000 BPD. That is not enough to have a major impact on total production of more than 9.5-M BPD.

In the futures market last week

Managed money (hedge funds) reversed course on Crude Oil again, selling Short contracts and adding to Long positions.

In the Commitment of Traders (COT) report for 6 October, published by the Commodity Futures Trading Commission (CFTC) last Friday, hedge funds added 15,192 Long contracts and exited 7,885 contracts from their Short positions.

Managed money holds 278,318 l Long positions compared with 104,851 Short positions. Open interest increased by 57,774 contracts to 1,675,676 W-W.

For the past week, Crude Oil imports averaged over 7.3-M BPD, up by 247,000 BPD compared with the prior week. Refineries were running at 86% of capacity, with daily input of 15.3-M BPD, about 2,000 BPD below the prior week’s average.

According to AAA, the national average pump price per gallon of regular gasoline is 2.293, down less than 1c from 2.297 a week ago and down from 2.322 a month ago. Last year at this time, a gallon of regular cost 3.177 on average in the United States.

Below is a look at how share prices of 2 blue-chip stocks and ETF’s reacted to this latest EIA report as follows:

Exxon Mobil Corp. (NYSE: XOM) closed Friday at at 82.48 Vs a 52-wk trading range of 66.55 – 97.20. YTD, Exxon stock traded down about 13% and is down about 17% since early November, as of Friday’s close.

Chevron Corp. (NYSE: CVX) closed Friday 91.29 Vs a 52-wk trading range of 69.58 – 120.17. As of Friday’s close, Chevron shares have fallen about 20% YTD and trade down about 25.6% since early November.

The United States Oil ETF (NYSEArca:USO) finished Friday at 15.22 Vs a 52-wk trading range of 12.37 – 31.91.

The Market Vectors Oil Services ETF (NYSEArca: OIH) finished Friday at 30.67 Vs a 52-wk trading range of 26.00 – 46.02

Have a terrific weekend.

Paul Ebeling

HeffX-LTN

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