EIA - Weekly Petroleum Report - Sept 23

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dan_s
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EIA - Weekly Petroleum Report - Sept 23

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Summary of Weekly Petroleum Data for the week ending September 18, 2020

U.S. crude oil refinery inputs averaged 13.4 million barrels per day during the week ending September 18, 2020 which was 119,000 barrels per day less than the previous week’s average.
Refineries operated at 74.8% of their operable capacity last week.
Gasoline production increased last week, averaging 9.3 million barrels per day.
Distillate fuel production increased last week, averaging 4.5 million barrels per day.

U.S. crude oil imports averaged 5.2 million barrels per day last week, up by 160,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 5.1
million barrels per day, 24.2% less than the same four-week period last year.
Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 474,000 barrels per day, and distillate fuel imports averaged 136,000 barrels per day.

> U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 1.6 million barrels from the previous week. At 494.4 million barrels, U.S. crude oil inventories are about 13% above the five year average for this time of year.
> Total motor gasoline inventories decreased by 4.0 million barrels last week and are about 1% above the five year average for this time of year. Finished gasoline inventories increased while blending components inventories decreased last week.
> Distillate fuel inventories decreased by 3.4 million barrels last week and are about 21% above the five year average for this time of year.
> Propane/propylene inventories increased by 1.7 million barrels last week and are about 12% above the five year average for this time of year.
> > Total commercial petroleum inventories decreased by 7.5 million barrels, last week. < Very bullish, but tropical storm activity in the GOM had a lot to do with this.

Total products supplied over the last four-week period averaged 17.8 million barrels a day, down by 15.9% from the same period last year.
Over the past four weeks, motor gasoline product supplied averaged 8.5 million barrels a day, down by 9.0% from the same period last year.
Distillate fuel product supplied averaged 3.6 million barrels a day over the past four weeks, down by 8.2% from the same period last year.
Jet fuel product supplied was down 45.8% compared with the same four-week period last year.
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MY TAKE: Demand for crude oil currently exceeds global oil production by over 2.0 million bpd, so inventories should keep falling. The gap between demand and supply will grow in Q4 to over ~3.5 million bpd unless their are SIGNIFICANT pandemic related shutdowns. I did get a report from BofA Equity research this morning that said Covid-19 cases are up in Europe, but hospitalizations are not up. The next two paragraphs are cut directly from the BofA report.

The curious case of European infected.
Many focus on the fact that new Covid19 cases in Europe are running close to peak levels from earlier in the year – for example in the UK – or even higher, as in Denmark. However, daily new
hospitalizations of around 250 and 20 in the two countries, respectively, are 1/20th or less than the experience earlier in the year. We believe this could indicate at least three things. First and foremost, the outbreak of Covid-19 early in the year was likely much, much larger than the current one – there was just insufficient testing to show that.
Second, for young people, the Corona crisis may be largely over, while those at risk have learned to live with it and stay safe. Hence, infected people are younger now and the consequences less.
Third, the Coronavirus might have mutated and become less deadly, which is an optimal strategy in order to spread.
Finally we might add that, due to today’s treatment options, even the consequences of requiring hospitalization are likely to be less.

 What this means is that measures to curb the spread of Covid-19 this time can be much more targeted instead of putting entire nations on lockdown. For example, Denmark recently moved to limit gatherings to 50 people from 100 and is requiring bars and restaurants to close at 10pm – both measures surgically targeting the root of the problem. The UK today announced new
restrictions similar in spirit plus limited mask requirement and encouraging people to work from home.
Dan Steffens
Energy Prospectus Group
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