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EIA Weekly Petroleum Status Report Commentary

• Crude oil stocks fell by 5.1 million barrels, the 3rd consecutive 2+ million barrel draw. Almost as important, stocks at Cushing, OK, increased by 0.3 million barrels to 36.1 million, leaving Cushing stocks less than 2 million barrels shy of the all-time record set May 14th
• Refinery utilization rates increased by 0.7% to 90.5%, crossing the 90% maximum that has held since early 2008
• Bloated distillate stocks: inventories ↑2.9 million barrels to 162.6 million barrels
• Motor gasoline stocks ↑1.6 million barrels after a 333,000 bpd decrease in imports was offset by increased domestic production (↑141,000 bpd) and softer demand (product supplied ↓369,000 bpd)

Consumer Hedge Tear Sheet

EIA Weekly Petroleum Status Report Commentary

• Bearish crude: Despite an eye-opening 4.96 million barrel decrease in crude oil inventories, stocks at the Cushing, OK oil trading hub fell by only 200,000 barrels. Until crude oil stocks significantly reduce further, the surplus inventory will easily absorb such draws
• Refineries increased crude oil inputs by 135,000 bpd, pushing utilization rates up 1.4% to 89.8%
• Gasoline stocks ↑1.32 million barrels while demand was flat due to higher-than-usual imports (↑223,000 bpd to 1.254 million bpd)
• Natural gas stocks rose by 78 BCF last week, 6 BCF greater than expected. Oct10/Jan11 is $0.045 wider at -$0.797 as the risk of insufficient year-end storage levels slightly diminishes further, all else being equal

Chris Thorpe's letter to the editor: Wall Street Journal

Below is a letter that Chris Thorpe submitted to the editor of the Wall Street Journal on Tuesday. The original op-ed is available at: Click Here

Sir,

The Dodd-Frank bill should do Main Street a favor. The proposal to move derivatives to the exchange will help avoid Enron-like disasters in the commodity and derivative transactions in the United States as well as its trading counter parties. For those main street customers holding derivatives with BP, I rest my case. For consumer hedgers that fear collateral capital risk, the Dodd-Frank bill clearly defines a carve-out for consumer hedgers.

Chris Thorpe, CFA
Managing Member, HCEnergy, LLC
New York, NY

Consumer Hedge Tear Sheet

EIA Weekly Petroleum Status Report Commentary

• Bearish crude: Crude oil stocks fell by 2.0 million barrels last week, attributed to a 631,000 bpd decrease in crude oil imports. Refineries decreased consumption of crude oil by 98,000 bpd
• Distillate stocks ↑2.5 million barrels: this is the largest build since April 23 and is 1.7 million barrels above Reuters survey expectations
• Refinery utilization ↓1% to 88.4%, reversing most of last week's unexpected 1.5% increase
• Crude oil at the closely-watched Cushing, OK storage nexus ↓0.8 million barrels to 36.0 million barrels, the second consecutive draw of about 800,000 barrels. Stocks are now 2 million barrels off of the all-time high set on May 14th