Blue Lacy Advisors, LLC - September Crude Oil Market Commentary
Minneapolis, MN | September 26, 2022 | By: Steve Sinos, Blue Lacy Advisors, LLC
Crude into China, which analysts have closely monitored with hopes of a bullish signal, ticked up MoM based on the most recently available monthly figures - but still trails last year by >10%. Competition among suppliers seemed to continue, with importers preferring Russian, Iraqi, and Emirati barrels over US and Saudi the previous month. Russia and the UAE have persistently ranked among the most significant growth sources, exceeding 300 kbd of growth YoY, compared to Brazil and Saudi Arabia, which have seen 200-300 kbd reductions in Chinese demand for imports. The story however more likely points to slow refinery activity. It looks like refiners are running 13-13.5 mm bpd of crude throughput through the middle of September, still trailing 2021 by as much as 800 kbd. Refinery runs should pick up in the coming weeks, with consensus forecasts expecting throughput to rebound to around 14 mm bpd. Refinery intake should pick up across the globe into the 4Q, a bullish signal for crude oil into the end of the year. The models have increasingly seen this as a bullish factor, contributing as much as 12% of the expected change in price through the end of the year, which roughly calculates into upward pressure of $1-3, assuming a midpoint of ~$90 in a range of ~$83-105
*This summary is based off September 20th, 2022
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Meet the Author!
Steve has spent his career in strategy, risk, trading, and investment. He works with investors to source investments in opportunistic or high growth sectors, with particular interest in early-stage companies solving clearly defined problems.
He is currently a Managing Partner with Blue Lacy Advisors LLC, giving management teams and investors confidence in their decision making by supporting strategic planning and execution, risk management, commodity trading, and market analysis.
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