EIA Report: The Devil is in the details

[dan_s]

Go here and spend ten minutes scanning the details of the EIA's weekly petroleum liquids report. > https://www.eia.gov/dnav/pet/pet_sum_sn ... _nus_w.htm

Here is what I noticed.
> U.S. oil production went DOWN As I posted here many months ago, I think EIA has and will continue to overstate U.S. oil production. They have also under-stated demand growth.
> Refinery utilization rate of 97.6% is VERY HIGH for this time of year. It was 92.9% in 2016 and only 77.7% in 2017 because of Hurricane Harvey.
> Inventories based on days of supply seem extremely low to me.
>> 22.3 days for crude oil (below 20 days is considered "dangerously low")
>> 22.4 days for gasoline. Yes, in volume we are in the upper half of the range, but with a booming economy we are consuming a lot more gasoline these days and we export gasoline.
>> 24.6 days for jet fuel (jet fuel demand is much higher than it was at this point last year. Again, because of a booming economy)
>> 34.6 days for distillates (this seems high, but days of supply is based on current U.S. only demand and we are at the low point of the year for demand. Also, we are exporting ~1,700 barrels per day and exports are not included in the days of supply calculation.)

Imports of oil are down and my bet is that they will be down over the next two weeks because tankers will not sail into "Troubled Waters". Hurricanes Florence and Isaac are definitely keeping oil tankers away from the U.S. Gulf Coast.

Let me be CRYSTAL CLEAR: U.S. shale oil and OPEC cannot make up for the loss of Iranian oil exports. OPEC is tapped out. There is very little if any remaining excess capacity. Anyone that tells you that Saudi Arabia can bring another 2 MMBOPD to market is lying. If oil exports from Iran and Venezuela keep falling, the global oil market will be extremely tight by year-end. All it will take is one "Unplanned Supply Outage" an Brent goes over $100/bbl. Brent closed at $79.74 today.