Crude oil supply/demand

[dan_s]

During the first eight weeks of 2018 the U.S. has imported 7,770,000 barrels of crude oil per day. This compares to 8,284,000 barrels per day during the first eight weeks of 2017.

U.S. commercial inventories of crude oil peaked at 535,543,000 bbls on 3/31/2017. From there, they dropped to 411,543,000 bbls on 1/19/2018. Oil inventories MUST BUILD this time of year so refiners have the feedstock needed for peak demand for transportation fuels in the spring and summer months. As of 2/23/2018 commercial inventories of crude oil were at 423,498,000 bbls, just 26.2 days of supply at the current rate of refinery throughput. 30 days of supply is considered "normal".

U.S. refineries are wrapping up their annual maintenance period and making adjustments to switch over to make "summer blend" gasoline. It takes more crude oil to make the summer blends because less NGLs can be blended in, primarily butane.

Crude oil stored at Cushing, Oklahoma (the hub were NYMEX contracts for oil are settled) have been on steep decline the last three months.
Oil at Cushing peaked on 4/7/2017 at 69,420,000 bbls. As of 2/23/2018 oil at Cushing is down to 28,785,000 bbls, dropping more than 35 million barrels since the end of October, 2017.

In 2017, U.S. refineries increased demand for crude oil by more than 2,000,000 barrels per day from mid-February to mid-April. If the spike is repeated this year, the oil market will be VERY TIGHT by the end of the 2nd quarter.