EIA - Petroleum Status Report - Oct 9

EIA - Petroleum Status Report - Oct 9

Postby dan_s » Wed Oct 09, 2019 9:43 am

Summary of Weekly Petroleum Data for the week ending October 4, 2019\

U.S. crude oil refinery inputs averaged 15.7 million barrels per day during the week ending October 4, 2019, which was 361,000 barrels per day less than the previous week’s average. Refineries operated at 85.7% of their operable capacity last week. < It is normal for refiners to reduce throughput in October as they do maintenance and make changes to produce winter blend gasoline and more heating oil.
Gasoline production decreased last week, averaging 10.1 million barrels per day. Distillate fuel production increased last week, averaging 4.8 million barrels per day.

U.S. crude oil imports averaged 6.2 million barrels per day last week, down by 67,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.5 million barrels per day, 16.8% less than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 642,000 barrels per day, and distillate fuel imports averaged 92,000 barrels per day.

> U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 2.9 million barrels from the previous week. At 425.6 million barrels, U.S. crude oil inventories are at the five year average for this time of year. < It normal and necessary for crude oil inventories to build in October.
> Total motor gasoline inventories decreased by 1.2 million barrels last week and are about 2% above the five year average for this time of year. Finished gasoline and blending components inventories both decreased last week.
> Distillate fuel inventories decreased by 3.9 million barrels last week and are about 9% below the five year average for this time of year.
> Propane/propylene inventories increased by 0.1 million barrels last week and are about 14% above the five year average for this time of year.
>> Total commercial petroleum inventories decreased last week by 8.3 million barrels last week. < This is bullish as it shows strong demand for refined products.

Total products supplied over the last four-week period averaged 20.9 million barrels per day, up by 3.0% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 9.2 million barrels per day, up by 0.5% from the same period last year. Distillate fuel product supplied averaged 3.9 million barrels per day over the past four weeks, down by 7.1% from the same period last year. Jet fuel product supplied was down 0.7% compared with the same four-week period last year.
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I'm heading over to The Hess Club for our luncheon today. We still have six seats available, so come on over if you are in H-Town. After the luncheon I will be driving to Dallas with the Canadians. I will be checking the markets and this Forum when we arrive at the Doubletree Hotel. As of this morning, we have 21 people registered for the Dallas luncheon. Still room for four more.
Dan Steffens
Energy Prospectus Group
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Re: EIA - Petroleum Status Report - Oct 9

Postby dan_s » Wed Oct 09, 2019 11:00 pm

Comments from Raymond James

This week's petroleum inventories update was mostly bullish relative to consensus. "Big Three" petroleum inventories (crude, gasoline, distillates – including SPR) fell by 2.4 MMBbls, versus consensus estimates calling for a draw of 0.7 MMBbls. Turning to crude, total inventories rose by 2.7 MMBbls, versus consensus calling for a build of 1.7 MMBbls and a normal seasonal build of 3.2 MMBbls. Refinery utilization fell to 85.7% from 86.4% last week. Total petroleum product demand increase 3.2% after last week’s 2.0% decrease. On a four-week moving average basis, there is a 3.0% y/y increase in total demand.


Amid the U.S.-China trade war – where the latest headlines are not encouraging – oil prices are being weighed down by the intensely negative macro sentiment, with day-to-day choppiness dominated by demand-related fears. Last month’s stunning oil supply disruption in Saudi highlighted the vulnerability of supply to geopolitical risk, and yet current oil prices are actually lower than they had been before the attack.

Even setting aside the Saudi situation, the fundamentally bullish supply side of the equation is largely being overlooked: the larger U.S. producers are exhibiting restraint in capital allocation and U.S. well productivity improvements are slowing down; OPEC plus Russia’s production cuts – in place through March 2020 – are noticeably contributing to inventory draws; U.S. sanctions against Iran continue to be impactful; and IMO 2020 is looming less than three months from now. The 12-month futures strip ($51.74/Bbl for WTI and $56.67/Bbl for Brent) shows modest backwardation for both Brent and WTI; for comparison, our 2019 forecast is $62.50 WTI/$71.00 Brent and the 2020 forecast is $92.50 WTI/$100 Brent.

There remain several key question marks, such as: 1) on the bullish side, the possibility of supply disruptions above and beyond the current ones, most notably a potential scenario of military escalation vis-à-vis Iran, and 2) on the bearish side, visible indications of global macro slowdown and resulting read-through for oil demand.
Dan Steffens
Energy Prospectus Group
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Posts: 21009
Joined: Fri Apr 23, 2010 8:22 am


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