Oil Storage Report - Jan 10

[dan_s]

From Reuters:
U.S. crude oil stocks fell last week while gasoline and distillate inventories rose more than anticipated, the Energy Information Administration said on Wednesday.

Crude inventories fell 4.9 million barrels in the week to Jan. 5, compared with analysts' expectations for a fall of 3.9 million barrels.

Oil prices dipped on the news before recovering. The decline in crude stocks fell short of industry group the American Petroleum Institute, which reported an 11 million-barrel crude draw on Tuesday evening.

In addition, refining runs fell, pulling back from a 12-year-high in capacity utilization, and stocks of gasoline and distillates like diesel rose.

However, U.S. production dropped sharply, though those figures are not considered as reliable as monthly data, which is released with a lag. U.S. production fell 290,000 barrels per day to 9.5 million bpd, the EIA said.

"There must be a special factor at play, perhaps the extreme winter weather in North Dakota, which hampered shale oil production in the Bakken," said Carsten Fritsch, oil analyst at Commerzbank AG (DE:CBKG) in Frankfurt, Germany.

U.S. crude futures (CLc1) were trading 22 cents to $63.19 a barrel as of 10:49 a.m. EST, while Brent (LCOc1) rose 14 cents to $68.95 a barrel.

Gasoline stocks rose 4.1 million barrels, compared with analysts' expectations in a Reuters poll for a 2.6 million-barrel gain.

Distillate stockpiles , which include diesel and heating oil, grew 4.3 million barrels, versus expectations for a 1.5 million-barrel increase, the EIA data showed.

"Refiners should be concerned with the continued increase in gasoline and distillate inventories, which will pressure refining margins," said Andrew Lipow, president of Lipow Oil Associates in Houston.

Refinery crude runs fell 285,000 bpd as utilization rates fell by 1.4 percentage points to 95.3 percent of total capacity, EIA data showed. < This is still very high for this time of year.

Crude stocks at the Cushing, Oklahoma, delivery hub fell by 2.4 million barrels, EIA said. < Very good news.

Net U.S. crude imports rose last week by 152,000 bpd.

[dan_s]

Go to this link: https://www.eia.gov/dnav/pet/pet_sum_sn ... _nus_w.htm

Take a HARD LOOK at the top line.

[dan_s]

The weekly EIA report is a bunch of numbers, but I think the most important numbers to focus on with regards to inventories are "Days of Supply". Keep in mind that the United States is very dependent on a steady flow of hydrocarbon based liquid fuels.

Days of Supply:
12/1/17 to 1/5/18

26.5 days down to 24.2 days for Crude Oil
24.3 days up to 26.1 days for Gasoline
33.0 days up to 36.9 days for Distillates (Diesel and Heating Oil)
23.4 days down to 22.4 days for Jet Fuel

If you hear anyone say we have a "glut" of oil, show them the stats above. If crude oil drops to 20 days supply, it becomes a national security issue.

[k1f]

The EIA chart of crude production from 1983-present is useful for visualizing where we are:

https://www.eia.gov/dnav/pet/hist/LeafH ... RFPUS2&f=W

Depressed production supported the strong bull mkt in energy 2000-09. The
production boom coincides with the depressed conditions we've been slogging thru.

[dan_s]

We really need to get Gasoline, Diesel and Jet fuel inventories up to more than 30 days of supply before Q2 when the next summer driving season approaches. Get ready for $3.00/gallon gasoline in Houston again. I paid $2.19/gallon at Sam's yesterday.

[dan_s]

I just got a bunch of charts from one of our members that show how tight U.S. supply and demand are for crude oil and fuels. Send me an email and I will forward them to you.