Maybe it was appropriate that his last message to his subjects surrounded oil. Saudi Arabia's King Abdullah bin Abdul-Aziz died after a long bout with pneumonia, giving oil a boost even in the face of a soaring dollar and a historic step by the European Central Bank to move towards quantitative easing. While the new king Salman bin Abdul-Aziz Al Saud is sending signals that the Saudi oil policy won’t change, the uncertainty and controversy surrounding the Saudi oil policy is creating at least some uncertainty and support in global oil markets.
King Salman is already signaling that Saudi oil policy will not change yet some critics of Saudi oil policy such as Price Alwaleed are hoping for a change. The big question is whether or not the new king wants to keep Ali Al-Naimi as Saudi Oil minister. There is a possibility that Ali Al-Naimi could be replaced as oil minister, especially because Mr. Naimi has been dropping hints about backing out of the role full time.
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There is also a possibility tensions in the Middle East will intensify as terrorist and insurgents may look at this as an opportunity to cause more unrest. The King has done a good job in fighting insurgents in Saudi Arabia and has joined the war on ISIS. He did not get along with the Obama administration and criticized the President for his push towards Democracy in Egypt, which he said was a mistake.
The news of the Kings death brought oil off the lows. Oil prices were under pressure after the European Central Bank engineered a market rally. By exceeding their leaked amount of quantitative easing by 10 billion Euros, it gave the markets what they wanted and more! Forget any deadline on QE, the kicker was that the ECB head Mario Draghi said they would continue QE until they reached their 2% target rate. The way things look right now means that could be QE forever.
U.S. crude oil imports averaged over 7.2 million barrels per day last week, down by 274,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged about 7.2 million barrels per day, 4.2% below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 683,000 barrels per day. Distillate fuel imports averaged 268,000 barrels per day last week. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 10.1 million barrels from the previous week. At 397.9 million barrels, U.S. crude oil inventories are at the highest level for this time of year in at least the last 80 years. Total motor gasoline inventories increased by 0.6 million barrels last week, and are well above the upper limit of the average range. Both finished gasoline inventories and blending components inventories increased last week. Distillate fuel inventories decreased by 3.3 million barrels last week and are in the lower half of the average range for this time of year. Propane/propylene inventories fell 3.6 million barrels last week but are well above the upper limit of the average range. Total commercial petroleum inventories increased by 2.4 million barrels last week.
Total products supplied over the last four-week period averaged 19.7 million barrels per day, up by 4.9% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged over 9.0 million barrels per day, up by 8.7% from the same period last year. Distillate fuel product supplied averaged 3.9 million barrels per day over the last four weeks, up by 12.5% from the same period last year. Jet fuel product supplied is up 7.6% compared to the same four-week period last year.
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