Oil slides into bear market as stockpiles surge

[Elderberry]

Houston Chronicle by  Jordan Blum June 5, 2019

Oil returned to a bear market Wednesday as surging stockpiles of petroleum rekindled fears of a supply glut amid record U.S. production and growing threats to global demand.

Crude fell more than 3 percent to settle at $51.68 after the Energy Department reported the biggest weekly jump in petroleum inventories in nearly 30 years. Oil prices have plunged more than 20 percent — the threshold for a bear market — since they hit their recent high of $66.30 about six weeks ago.

It’s the second time in less than a year that crude has slid into bear territory. Prices plunged 40 percent at end of last year, falling from about $76 a barrel at the beginning of October to less than $43 near the end of December.

More: https://www.houstonchronicle.com/business/energy/article/Oil-slides-into-bear-market-as-stockpiles-surge-13941210.php

[thackney]

Related:

Lowest crude oil imports since 1986 indicate changes in U.S. Gulf Coast crude oil supply
https://www.eia.gov/petroleum/weekly/index.php

[IsailedawayfromFR]

With the biggest inventory in 30 years, I wonder why we need to sell oil from the SPR as we did the past two years and have to do by law for the next 6 years?

https://www.energy.gov/fe/services/petroleum-reserves/strategic-petroleum-reserve/releasing-oil-spr

[Wingnut]

A big middle finger to OPEC. 

[IsailedawayfromFR]

A big middle finger to OPEC.

May be satisfying in the short term but we need to think long term, which is what the SPR is all about.

[Wingnut]

May be satisfying in the short term but we need to think long term, which is what the SPR is all about.

All I know and care about is we are positioned so much better than in 1973 and 1979 if the camel jockeys think they can have us over a barrel.  Pun intended.

[thackney]

All I know and care about is we are positioned so much better than in 1973 and 1979 if the camel jockeys think they can have us over a barrel.  Pun intended.

Selling oil from the SPR is selling our strength against OPEC.  The larger the reserve, the longer we can withstand any attempts to embargo or otherwise manipulate the market.

[IsailedawayfromFR]

All I know and care about is we are positioned so much better than in 1973 and 1979 if the camel jockeys think they can have us over a barrel.  Pun intended.

We are indeed positioned better for the longer term.  But the SPR is decidedly created for the short term as it can pull out quickly large amounts of crude.  Production from oil wells cannot be pulled out quickly as they generally already produce at maximum, so more oil wells will be needed to be drilled and fracced to achieve higher production, a process that takes months and years.

[thackney]

We are indeed positioned better for the longer term.  But the SPR is decidedly created for the short term as it can pull out quickly large amounts of crude.  Production from oil wells cannot be pulled out quickly as they generally already produce at maximum, so more oil wells will be needed to be drilled and fracced to achieve higher production, a process that takes months and years.

The SPR protects against more than OPEC as well.  Some domestic terrorist shutting down a few major pipelines like the Keystone and we will wish the SPR was full again.

[IsailedawayfromFR]

The SPR protects against more than OPEC as well.  Some domestic terrorist shutting down a few major pipelines like the Keystone and we will wish the SPR was full again.

Absolutely.  Although it should remain full to be most effective, its usage is more about quickly bringing on a lot of production in a hurry to fill those gaps, something that cannot be done otherwise without hijacking tankers.

[Fishrrman]

The lower oil prices go, the BETTER it is for the economy.
Let's see them down in the mid-40's!

<<-- ducking from the incoming insults of those members here who work in the industry!

[InHeavenThereIsNoBeer]

May be satisfying in the short term but we need to think long term, which is what the SPR is all about.

Doubt we'll ever see much long term thinking when there's always an election around the corner.