iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
20,629 Blog Posts

U.S. Adds a Few Million Barrels of Crude to Stockpile of More Than 538 Million

Come on already with the horseshit lies about crude and the bullish case for it. Crude was over $100 for years and no one had the slightest idea why that was the case. We were, seemingly, swimming in the stuff. Production was expanding rapidly and demand was flat. I chalked up the price of crude as something to be tolerated, a tax of sorts by assholes in power.

Then prices dropped and forced selling hit markets. Crude got down to the $20’s, at which point Dennis “The Commodity King” Gartman suggested it was headed for $15. In hindsight, those dark days were the best buying opportunities in many, many years. Since then, a multitude of oil stocks have doubled, some more.

What now?

Traders are taking every excuse they can muster to buy oil stocks, even though the price of crude has been rangebound for a month or so. All this is transpiring at a time when Iran, our new ally, is stepping back into the market, adding a few million barrels of crude–per day–to the already absurd supply glut.

“We paid for our barrels with our centrifuges,” the source said, referring to Iran’s acceptance of curbs on its nuclear program in order for Western sanctions on Tehran to be lifted.

“We are going to get our share back. For us, oil is only 12 percent of our GDP. We used to sell oil in the war (between Iran and Iraq in the 1980s) at $6 a barrel.”

iran

The Iranians are serious about punching Saudi Arabia in the face with jellied donuts.

Is it starting to resonate?

OPEC isn’t cutting supply. Iran is ADDING supply. Russia is operating at peak capacity with zero plans to slow. By my vantage point, the only major oil producing nations that will end up on the receiving end of a giant fucking L are the United States and Canada. To that point, in order to cut production, companies must go bankrupt. When that occurs, losses for the debt associated with those companies will be around 80 cents on the dollar.

At any rate, crude is trying to rally here, on news that we added ‘just’ 2.1 million barrels of crude to storage for the week, upping our stockpile to a mere 538 million fucking barrels of crude.

Our main storage hub, Cushing, OK, is just about full–dangerously close to being at full capacity. As a point in fact, we’ve never had more oil at Cushing than we do now.
US-cushing-crude-oil-stocks3

Capacity is 73 million barrels.

Go crude!

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17 comments

  1. blahblahblah

    are you still tying crude to fundamentals? lolz. four figures in the green again today. i have things out for sale…

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    • Dr. Fly

      You must have a very small penis to constantly barrage others with your trading achievements.

      As an aside, your rationale for rebuking my argument is infantile.

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      • blahblahblah

        where have I heard the penis attack. oh, yes it was marco rubio. ha ha

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  2. gorby

    We are sure it’s all fixed anyhow.

    So well sell -driving season bro.

    $50 oil soon

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  3. ottnott

    Maybe we could build a big pipeline to bring even more crude to Cushing.

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  4. javiergoldstein

    Started my short swing yesterday….so this move makes sense.

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  5. active shooter

    Short USO via July puts……………..10.5 put…..

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  6. blahblahblah

    if you shorted my CLR sale on the doha hope you’d be down 10% already lolz

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    • jwb

      CLR’s awesome. Apparently Hamm’s gonna sell to XOM tomorrow and donate all the proceedings to the Ex-Wife Hater’s Foundation to fund their tactical operations for the next millennium. I heard it on the internet.

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  7. blahblahblah

    i will self ban. opposing views apparently aren’t welcome.

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    • btn

      “lolz. four figures in the green again today.” is not an opposing view. It is a taunt, and an unprovable one at that.

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  8. jwb

    500+M barrels has little to do with production anymore. Half the new barrels are imports. Market thinks oil crash deserves a Big Long, so folks start sitting on barrels. Nobody cares where they sit on it. When it’s time to take profits, the inventories will drop. Production will be irrelevant then, too. For a while, the market will marvel that crude is high, but gas is cheap, and refining sucks.

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    • jwb

      … and somebody will make a movie called the Big Long about how OPEC, in order to spite the Americans, basically sold a couple hundred million barrels around $30 *to Americans* which we subsequently unloaded at $58 or so.

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  9. btn

    Interstingly, the EIA weekly production report goes into some analysis comparing high-debt on-shore oil-prodeucers with low-debt ones and found the losses concentrated in the high-debt group even though both groups had similar current and past production levels.

    US gasoline stocks have been dropping and prices are rising (anticipating summer travel). However, stocks are well above the five-year average and the US consumers are driving less, crippled by the demographic trends of aging baby boomers (who buy all the cars) and Millenials that don’t even bother to get driving licenses.

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  10. javiergoldstein

    I think Tech is going to be the next Oil…

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