DOE's March 941 Report

[dan_s]

The Department of Energy's 941 report is the first look at actual production. There is about a 90 day lag in when actuals are available.

This is what Raymond James had to say about the March 941 report:

DOE Petroleum Supply Monthly – March 914 oil data shows U.S. oil production growth below our model for the third month in a row. An expected seasonal recovery in GoM did allow overall supply to recover to near December 2018 highs. Some important points:

Total U.S. production came in about 75,000 bpd BELOW our model (11.905 million bpd versus our model at 11.979 million bpd)
Gulf of Mexico production rebounded by 191,000 bpd m/m (reversing the 193,000 bpd decline from February) slightly (18,000 bpd) below our model.
Lower 48 production came in 57,000 bpd BELOW our model – or actual growth of 41,000 bpd vs. our model at 98,000 bpd.
Major declines came from Colorado (-17,000 bpd m/m), Alaska (-7,000 bpd), and Texas (-6,000 bpd) – while North Dakota (+42,000 bpd) and Oklahoma (+16,000 bpd) offset prior month declines and New Mexico (+23,000 bpd) showed continued growth.

Showing some possible signs of weather related impact, total petroleum demand declined by 1.8% y/y in March (following a 1.7% y/y increase in February). Looking across the major products, gasoline saw a sizeable decline (-2.9% y/y – though gasoline margins have been indicating better since) while distillate demand held closer to flat (-0.3% y/y).
Bottom Line: While demand figures were down slightly m/m, this month’s DOE report was bullish since the data showed weaker L48 supply growth than we forecasted (+41,000 bpd actual vs. RJe +98,000 bpd). Further, this marks the third straight month in which L48 supply came in weaker than our model, averaging ~66,000 bpd below our monthly forecast for each of the first three months of the year. Overall, the report shows continued slower production growth than expected and suggests a tighter oil market than we previously anticipated. This is the first time that actual growth has come in below our forecast for four consecutive months since we initiated our U.S. supply model in 2012.

May 31, 2019