Poten’s Crude Oil Highlights

26 Jun 2015: This week’s reports for US oil fundamental data were mixed this week for oil prices.  Oil production rose, while US oil inventories declined and the number of operating oil-drilling rigs declined.  The US Dollar generally strengthened, which is a directionally bearish development for oil prices. US crude production rose by 15 thousand barrels a day in the June 19 weekly EIA report.  Production was at 9.604 million barrels a day.  US crude inventories declined for an eighth consecutive week.  Crude oil inventories were at 463.0 million barrels, which is down 4.9 million barrels (excluding the Strategic Petroleum Reserve). The number of active crude oil drilling rigs in the US declined for a 29^th straight week.  The Baker Hughes rig count was reduced to 628 for June 26, which is down by three rigs versus the previous week.  Fewer rigs were noted for North Dakota and Texas areas encompassing the Eagle Ford shale and Permian basin in west Texas. Crude oil markets were mixed this week, with benchmark sweet grades marginally lower or higher, depending upon the grade.  Prices for sour crude oil grades declined in western Canada. August West Texas Intermediate (WTI) crude prices at Cushing, Oklahoma ended the week at $59.63 a barrel, down $0.34 a barrel versus the previous week.  The US Dollar index rose against most currencies this week.  Financial markets are closely following difficult negotiations between European Community officials and the Government of Greece on Greek debt.  That could potentially add substantial turbulence to stock, bond and currency markets in the upcoming week, depending upon the outcome of those negotiations. August Brent prices finished the week at $63.26 a barrel, up $0.24 a barrel versus the previous Friday close.  The Brent price premium over WTI for August crude rose to $3.63 a barrel. Western Canadian Select crude (WCS) prices moved lower this week, with larger discounts to WTI crude reported.  August WCS prices were down to just over $48 a barrel FOB Alberta this week.  WCS prices for August were about $11.35 a barrel under August WTI, versus $10 last week.  The spread between WCS and WTI widened considerably between July and August.