Energy Prospectus

Summary of Weekly Petroleum Data for the week ending July 16, 2021

U.S. crude oil refinery inputs averaged 16.0 million barrels per day during the week ending July 16, 2021 which was 87,000 barrels per day less than the previous week’s average. Refineries operated at 91.4% of their operable capacity last week.
Gasoline production decreased last week, averaging 9.1 million barrels per day.
Distillate fuel production decreased last week, averaging 4.9 million barrels per day.

U.S. crude oil imports averaged 7.1 million barrels per day last week, increased by 0.9 million barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.4 million barrels per day, 2.9% more than the same four-week period last year. < Higher imports last week and likely lower exports is only way to explain the build in crude oil inventories. Caused by Hurricane Elsa moving out of the way and allowing tankers to get to the Gulf Coast. Late yesterday, API reported a big drop in oil inventories at Cushing, OK.
Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 1.4 million barrels per day, and distillate fuel imports averaged 87,000 barrels per day.

> U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 2.1 million barrels from the previous week. At 439.7 million barrels, U.S. crude oil inventories are about 7% below the five year average for this time of year.
> Total motor gasoline inventories decreased by 0.1 million barrels last week and are at the five year average for this time of year. Finished gasoline inventories decreased while blending components inventories increased last week.
> Distillate fuel inventories decreased by 1.3 million barrels last week and are about 4% below the five year average for this time of year.
> Propane/propylene inventories increased by 3.1 million barrels last week and are about 15% below the five year average for this time of year.
>> Total commercial petroleum inventories increased by 4.4 million barrels last week.

Total products supplied over the last four-week period averaged 20.6 million barrels a day, up by 15.0% from the same period last year.
Over the past four weeks, motor gasoline product supplied averaged 9.4 million barrels a day, up by 9.5% from the same period last year.
Distillate fuel product supplied averaged 3.8 million barrels a day over the past four weeks, up by 10.1% from the same period last year.
Jet fuel product supplied was up 49.5% compared with the same four week period last year.
---------------------------
Keep in mind that tropical storm activity in the Gulf of Mexico can have a significant impact on both production and on the ability of oil tankers to enter or leave the area. Also, the gap between WTI and Brent oil prices has narrowed, which lowers the profit margin for exports of U.S. light oil.

AEGIS Note
EIA reported a build of 2107 MBbls in U.S. crude-oil inventories for the week ending 7/16/2021. This was smaller than the average estimate of -3912 MBbls as reported by Bloomberg.

Prices were up five minutes following the announcement, to $69.41, from $69.32 just before 9:30am.

Inventories for the US are now at a deficit of 92.001 MBbls to last year and a deficit of 35.93 MBbls to the five-year average.

At the time of this post (10:08 AM CT), WTI is up $2.55 on the day to $69.73/bbl.

The Wall Street Gang seldom forgets stuff like how hurricanes impact ship captains. Oil tankers do not do well in 40-50 foot waves. Plus, the recent spike in Covid cases had NOTHING TO DO WITH what EIA reported for the week ending July 16.

Investing.com -- Stockpiles of U.S. crude oil unexpectedly rose last week, snapping eight previous weeks of drawdowns, the Energy Information Administration said on Wednesday.

Crude inventories showed a build of 2.108 million barrels last week, compared with analysts' expectations for a draw of 4.466 million barrels.

Distillate stockpiles, which include diesel and heating oil, showed a draw of 1.349 million barrels in the week against expectations for a build of 557,000 barrels, the EIA data showed.

Gasoline inventories fell 121,000 barrels last week the EIA said, compared with expectations for a draw of 1.043 million barrels.

The higher crude numbers came after eight straight weeks of drawdowns that removed more than 40 million barrels from stockpiles, sending oil “prices” to four-year highs of almost $78 a barrel.

New York-traded West Texas Intermediate crude, the benchmark for U.S. oil, tumbled 7.5% to under $67 a barrel at the start of this week for its worst sell-off in 16 months on worries about an output hike announced by producer group OPEC+ and reports of resurfacing cases of Covid-19. However, in Wednesday's session, WTI was up almost 4% at just under $70 a barrel in what appeared to be a counter-risk trade, despite the data released by the EIA.

“Well we have it now, the first U.S. crude build in nine weeks,” Investing.com analyst Barani Krishnan said. “Yet, oil prices are going the other way, probably because they have given up so much already in recent days.”

“At some point though, more builds reported by the EIA will matter, especially if the Delta variant starts inhibiting gasoline refining. For now, the variant can be shrugged off as a hype amid the still-busy reopening fervor in New York and other cities. But once authorities start reacting more seriously to the threat, i.e. reintroducing masking and social curbs, or companies start telling people to work from home again, that can’t be too good for oil market sentiment.”

Covid cases involving the Delta variant surged in recent weeks, prompting some countries, including Australia and South Korea, to reintroduce restrictive measures. The United Kingdom on Saturday reported the highest number of daily Covid-19 cases since Jan 2021.