EIA US oil inventory data released on Wednesday surprised many investors by reporting unexpectedly large draws in crude, distillates and gasoline stocks last week.
While on the surface this came might have come across as bullish for the energy complex, one factor more than others probably accounted for the pickup in demand. Via Reuters:
Tropical storm Ida temporarily shut in up to 43 percent of U.S. Gulf crude production after it made landfall on Tuesday of last week, according to government data.
In other words tropical storm Ida left more of a footprint on US energy markets, than many anticipated. Consequently, it’s unlikely that the data marks any reversal in the recent trend towards oil and product stockbuilds.
If, by the way, you were curious to see how profitable the storage business has become on the back of shoddy energy demand fundamentals, it’s worth checking out the latest third quarter results of Dutch chemical and oil storage firm Vopak — the world’s largest independent terminal operator (H/T Climateer Investing).
The Rotterdam-based firm reported a 29 per cent increase in third quarter operating profit on November 12, while raising its full-year earnings outlook to “at least” €510m versus €495m citing “strong demand” for its services.
Vopak’s shares soared 5 per cent on the day and are now trading at their highest level since the firm was created in 1999 — giving the company a rough value of some €3.43bn.
Related links:
Goldman warns of near-term downside risk in WTI - FT Alphaville
Is oil about to have a physical reality check? – FT Alphaville