Energy Prospectus

Summary of Weekly Petroleum Data for the week ending March 25, 2022 With my comments in blue.

U.S. crude oil refinery inputs averaged 15.9 million barrels per day during the week ending March 25, 2022 which was 35,000 barrels per day more than the previous week’s average.
Refineries operated at 92.1% of their operable capacity last week.
Gasoline production decreased last week, averaging 9.1 million barrels per day.
Distillate fuel production increased last week, averaging 5.1 million barrels per day.

U.S. crude oil imports averaged 6.3 million barrels per day last week, down by 227,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.4 million barrels per day, 11.9% more than the same four-week period last year.
Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 656,000 barrels per day, and distillate fuel imports averaged 155,000 barrels per day.

Focus on the size of the deficit to the 5-year average.
> U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.4 million barrels from the previous week. At 409.9 million barrels, U.S. crude oil inventories are about 14% below the five year average for this time of year. < Keep in mind that we are drawing oil from the SPR. 14% deficit to the 5-year average is HUGE and we should be building crude oil inventories so the refiners have ample feed stock to produce transportation fuels when the seasonal spike in demand starts in May.
> Total motor gasoline inventories increased by 0.8 million barrels last week and are about 0% above the five year average for this time of year. Finished gasoline and blending components inventories both increased last week. < The U.S. should be able to avoid gasoline rationing. The ultra-light oil from the shale plays can be refined into gasoline.
> Distillate fuel inventories increased by 1.4 million barrels last week and are about 16% below the five year average for this time of year. < This is the BIG PROBLEM. Farmers and Truckers need lots of diesel. The U.S. economy cannot function without a steady supply of diesel. Regional supply rationing may be necessary. A Gulf of Mexico hurricane will cause a big supply problem across the South.
> Propane/propylene inventories increased by 0.1 million barrels last week and are about 23% below the five year average for this time of year. < Just like natural gas inventories, propane inventories MUST be refilled before the next winter heating season arrives. NGL prices should remain very high this year.
>> Total commercial petroleum inventories increased by 1.8 million barrels last week. < We need to make a lot more progress in refilling inventories in April or an "Economic Train Wreck" with even small supply outages this summer is possible.

Total products supplied over the last four-week period averaged 20.7 million barrels a day, up by 8.1% from the same period last year.
Over the past four weeks, motor gasoline product supplied averaged 8.8 million barrels a day, up by 1.1% from the same period last year.
Distillate fuel product supplied averaged 4.2 million barrels a day over the past four weeks, up by 2.4% from the same period last year.
Jet fuel product supplied was up 39.1% compared with the same four week period last year. < Already seeing jet fuel supply problems at some airports.
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AEGIS Notes: "Inventories for the U.S. are now at a deficit of 92.00 MMBbls (-18.3%) to last year, and a deficit of 64.70 MMBbls (-13.6%) to the five-year average."

Some of our most important refined product inventories are below the bottom of the 5-year range and we have yet to see physical supply problems caused by the sanctions against Russia. Team Biden will continue to blame high fuel prices on Putin, but this is our own fault.
Supply chain issues are causing well-completion problems in all oil basins. They will get much worse if we are forced to ration diesel.

New industry report warns of revenue bleed without new leasing. E&E News.
A new report from the oil and gas industry warns of severe production declines in the Gulf of Mexico — and a billion-dollar bleed in federal revenues — if the Biden administration continues to delay offshore oil and gas leasing. Commissioned by the American Petroleum Institute and National Ocean Industries Association (NOIA), the study also flags the upcoming sunset of the Interior Department’s five-year leasing program, a document required under the Outer Continental Shelf Act that lays out a schedule for offshore oil and gas lease auctions. The Biden administration has not yet revealed steps for releasing a new plan, raising questions about the near- and long-term outlook for oil and gas development on the outer continental shelf.

Oil execs agree to testify before House lawmakers about rising gas prices. Fox Business.
Executives from some of the country’s largest oil companies have agreed to testify before House lawmakers next week about record-high gas prices. The House Committee on Energy and Commerce said on Tuesday executives from BP America, Chevron, Devon Energy Corp., ExxonMobil Corp., Pioneer Natural Resources Co., and Shell USA, will participate in the House hearing. The April 6 hearing notably does not include the nation's two largest refineries, Texas-based Marathon or Valero, or the owner of the largest refinery in America, Saudi Aramco. Refining is a key step between oil production and the gas pump.