Energy Prospectus

Summary of Weekly Petroleum Data for the week ending August 9, 2019

U.S. crude oil refinery inputs averaged 17.3 million barrels per day during the week ending August 9, 2019, which was 475,000 barrels per day less than the previous week’s average. Refineries operated at 94.8% of their operable capacity last week. Gasoline production decreased last week, averaging 10.2 million barrels per day. Distillate fuel production decreased last week, averaging 5.1 million barrels per day.

U.S. crude oil imports averaged 7.7 million barrels per day last week, up by 566,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 7.1 million barrels per day, 12.0% less than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 805,000 barrels per day, and distillate fuel imports averaged 126,000 barrels per day.

> U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 1.6 million barrels from the previous week. At 440.5 million barrels, U.S. crude oil inventories are about 3% above the five year average for this time of year. < Higher imports and less refinery inputs = crude oil storage build.
> Total motor gasoline inventories decreased by 1.4 million barrels last week and are about 4% above the five year average for this time of year. Finished gasoline and blending components inventories both decreased last week.
> Distillate fuel inventories decreased by 1.9 million barrels last week and are about 3% below the five year average for this time of year.
> Propane/propylene inventories increased by 3.2 million barrels last week and are about 9% above the five year average for this time of year.
> Total commercial petroleum inventories increased last week by 2.4 million barrels last week. < Take out the propane increase and real oil inventories went down.

Total products supplied over the last four-week period averaged 21.6 million barrels per day, up by 3.7% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 9.7 million barrels per day, up by 0.6% from the same period last year. Distillate fuel product supplied averaged 4.0 million barrels per day over the past four weeks, up by 1.0% from the same period last year. Jet fuel product supplied was up 2.1% compared with the same four-week period last year.
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The oil price "Roller Coaster Ride" will continue.

Investing.com - U.S. crude oil inventories unexpectedly rose last week, marking a second-consecutive week of surprise builds, according to official data released Wednesday.

The Energy Information Administration said in its regular weekly report that crude oil inventories increased by 1.58 million barrels in the week to Aug. 9.

That was compared to forecasts for a stockpile drawdown of 2.78 million barrels, after a gain of 2.39 million barrels in the previous week.

The EIA report also showed that gasoline inventories decreased by 1.41 million barrels, compared to expectations for a build of 0.03 million barrels, while distillate stockpiles fell by 1.94 million barrels, compared to forecasts for a gain of 0.99 million.

Oil prices had already been falling ahead of the release, following a similar reading on U.S. crude stockpiles from the American Petroleum Institute after the markets closed on Tuesday, while weak economic data released overnight, along with an inversion of the yield curve in the U.S., stoked concerns over a global recession that would reduce demand for oil.

Data released earlier showed that Chinese industrial output growth hit its lowest level in 17 years, while the German economy contracted in the second quarter. Analysts signaled both data points as signs of the negative impact from trade conflicts, especially the U.S.-China dispute.

The yield on the U.S. 10-year Treasury note fell below that of the 2-year, inverting the curve for the first time since 2007. Some economists consider the yield curve inversion to be an early indicator of a recession.

Aside from Wednesday’s slide, oil has been dogged by volatililty month as crude reacts to trade and economic news.

“Oil prices are experiencing some of their greatest volatility ever as the U.S.-China trade war yanks crude around like a yo-yo,” Investing.com senior commodity analyst Barani Krishnan said, suggesting that the current “rollercoaster ride” may be far from over.

Whose inventories are the purported 2 million bbl/d shortfall of supplies in Q3 coming from?

These weekly reports from API and EIA are just based on formulas. They don't have any real readings on individual wells or storage tanks. They rely heavily on reports from companies that (trust me on this) don't even know what their own production is on a weekly basis. When I was at Hess, we were correcting "actual production volumes" for several months and so were all of our industry partners.

Some of the oil in storage is owned by individuals or hedge funds that want to hold physical oil as a hedge against inflation. If you are going to hold oil in storage, the safest place to hold it is in the U.S.

Accurate data on oil production and inventories is "questionable" in the U.S. but it is downright impossible to know for the world. Actual data is at least three months old and even that is questionable.

I was looking at EIA's historical data for U.S. oil production last week and I noticed that they had changed some weekly numbers that they had reported earlier this year. Since May, their STEO report ("Short Term Energy Outlook") has been telling us that U.S. oil production keeps going up, but their weekly reports show a decline since the week ending May 31st.

IEA has a long history of under-stating global oil demand and then adjusting previously reported data. My opinion, is that when in doubt they always report what will hold down fuel prices as long as they can. It is human nature to want to please your boss.

What better info does Raymond James have to base their forecasts? I assume they have the opposite bias in that the want to sell stocks.