The U.S. Energy Information Administration said in its weekly report that crude oil inventories increased by 1.6 million barrels in the week ended March 23. Expectation were for a decline of around 0.2 million barrels, but it was less than the 5.3-million-barrel build reported by the American Petroleum Institute late Tuesday. < Remember that February and March is when crude oil inventories MUST BUILD to meet the big jump in demand that comes each year in the 2nd quarter.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, rose by 1.8 million barrels last week, the EIA said.
Total U.S. crude oil inventories stood at 429.9 million barrels as of last week, which the EIA considered to be in the lower half of the average range for this time of year.
Per EIA estimates U.S. crude oil production rose to a fresh all-time high of 10.43 million barrels per day last week, keeping it above Saudi Arabia's output levels and within reach of Russia, the world's biggest crude producer. < Actual U.S. production will not be known for three month.
The report also showed that gasoline inventories decreased by 3.5 million barrels, compared to expectations for a decline of nearly 2.0 million barrels. For distillate inventories including diesel, the EIA reported a drop of 2.1 million barrels. < Big draws on transportation fuels are just beginning the annual ramp up.
Oil Storage Report - March 28
Oil Storage Report - March 28
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Storage Report - March 28
Deeper look at EIA report:
Refinery crude runs rose by 18,000 barrels per day, EIA data showed. Refinery utilization rates rose by 0.6 percentage points.
Gasoline stocks fell by 3.5 million barrels, compared with analysts' expectations in a Reuters poll for a 2 million barrels drop.
Distillate stockpiles , which include diesel and heating oil, fell by 2.1 million barrels, versus expectations for a 1.6 million barrels drop, the EIA data showed.
Net U.S. crude imports rose last week by 1.066 million barrels per day.
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So... the build in crude inventories is all because more ships delivered oil to the Gulf Coast.
So... Refiners continue to ramp back up as annual maintenance comes to an end. Despite the higher utilization rate, gasoline and distillates inventories continue to fall. Demand for refined products is high and will be going a lot HIGHER in Q2.
Refinery crude runs rose by 18,000 barrels per day, EIA data showed. Refinery utilization rates rose by 0.6 percentage points.
Gasoline stocks fell by 3.5 million barrels, compared with analysts' expectations in a Reuters poll for a 2 million barrels drop.
Distillate stockpiles , which include diesel and heating oil, fell by 2.1 million barrels, versus expectations for a 1.6 million barrels drop, the EIA data showed.
Net U.S. crude imports rose last week by 1.066 million barrels per day.
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So... the build in crude inventories is all because more ships delivered oil to the Gulf Coast.
So... Refiners continue to ramp back up as annual maintenance comes to an end. Despite the higher utilization rate, gasoline and distillates inventories continue to fall. Demand for refined products is high and will be going a lot HIGHER in Q2.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Storage Report - March 28
Raymond James take on Wednesday's EIA report:
This week's petroleum inventories update was mostly bullish relative to consensus. ''Big Three'' petroleum inventories (crude, gasoline, distillates) fell by 3.9 MMBbls, versus consensus estimates for a draw of 3.5 MMBbls. Commercial crude inventories rose by 1.6 MMBbls, versus consensus calling for a build of 0.9 MMBbls. Cushing crude inventories rose by 1.8 MMBbls, with Gulf Coast inventories down 5.2 MMBbls. Gasoline posted a draw of 3.5 MMBbls versus consensus calling for a draw of 2.4 MMBbls, while the distillate draw of 2.1 MMBbls compared to consensus calling for a draw of 2.0 MMBbls. As always, regardless of their week-to-week movements, U.S. inventories do not constitute a holistic picture of global (or even total OECD) inventories, but they represent the only ''real-time'' data source.
Refinery utilization ticked up to 92.3% from 91.7% last week. Total petroleum imports were 10.3 MMBbls per day, up from last week's 8.9 MMBbls per day. Total petroleum product demand increased 1.2% after last week's 1.2% decrease. On a four-week moving average basis, there is a 5.7% y/y increase in total demand. Lower 48 production is estimated at 9.917 MMBbls per day, up 0.025 MMBbls per day from last week, and 1.291 MMBbls per day above year-ago levels. As always, weekly demand and supply figures are provisional estimates subject to frequent revisions.
Following the March rally, we remain of the view that oil prices have room to exhibit further strength in the course of 2018. U.S. producers are starting to exhibit more restraint in capital allocation; OPEC's production discipline remains supportive; there are still supply declines in several non-OPEC geographies (e.g., Mexico), alongside ongoing supply disruptions/challenges (especially Venezuela); and the picture for global demand growth is broadly upbeat. The 12-month futures strip ($59.07/Bbl for WTI and $63.34/Bbl for Brent) shows a backwardated near-term curve for both WTI and Brent. Several wildcards remain in play, such as: 1) on the bullish side, the possibility of supply disruptions above and beyond the current ones; and 2) on the bearish side, the prospect of recovery in the U.S. dollar, which is currently near three-year lows.
This week's petroleum inventories update was mostly bullish relative to consensus. ''Big Three'' petroleum inventories (crude, gasoline, distillates) fell by 3.9 MMBbls, versus consensus estimates for a draw of 3.5 MMBbls. Commercial crude inventories rose by 1.6 MMBbls, versus consensus calling for a build of 0.9 MMBbls. Cushing crude inventories rose by 1.8 MMBbls, with Gulf Coast inventories down 5.2 MMBbls. Gasoline posted a draw of 3.5 MMBbls versus consensus calling for a draw of 2.4 MMBbls, while the distillate draw of 2.1 MMBbls compared to consensus calling for a draw of 2.0 MMBbls. As always, regardless of their week-to-week movements, U.S. inventories do not constitute a holistic picture of global (or even total OECD) inventories, but they represent the only ''real-time'' data source.
Refinery utilization ticked up to 92.3% from 91.7% last week. Total petroleum imports were 10.3 MMBbls per day, up from last week's 8.9 MMBbls per day. Total petroleum product demand increased 1.2% after last week's 1.2% decrease. On a four-week moving average basis, there is a 5.7% y/y increase in total demand. Lower 48 production is estimated at 9.917 MMBbls per day, up 0.025 MMBbls per day from last week, and 1.291 MMBbls per day above year-ago levels. As always, weekly demand and supply figures are provisional estimates subject to frequent revisions.
Following the March rally, we remain of the view that oil prices have room to exhibit further strength in the course of 2018. U.S. producers are starting to exhibit more restraint in capital allocation; OPEC's production discipline remains supportive; there are still supply declines in several non-OPEC geographies (e.g., Mexico), alongside ongoing supply disruptions/challenges (especially Venezuela); and the picture for global demand growth is broadly upbeat. The 12-month futures strip ($59.07/Bbl for WTI and $63.34/Bbl for Brent) shows a backwardated near-term curve for both WTI and Brent. Several wildcards remain in play, such as: 1) on the bullish side, the possibility of supply disruptions above and beyond the current ones; and 2) on the bearish side, the prospect of recovery in the U.S. dollar, which is currently near three-year lows.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group