Energy Prospectus

Summary of Weekly Petroleum Data for the week ending January 6, 2023

U.S. crude oil refinery inputs averaged 14.7 million barrels per day during the week ending
January 6, 2023 which was 831 thousand barrels per day more than the previous week’s average.
Refineries operated at 84.1% of their operable capacity last week. Gasoline production slightly
increased last week, still averaging 8.5 million barrels per day. Distillate fuel production
increased last week, averaging 4.5 million barrels per day.

U.S. crude oil imports averaged 6.4 million barrels per day last week, increased by 637,000
barrels per day from the previous week. Over the past four weeks, crude oil imports averaged
about 6.0 million barrels per day, 3.1% less than the same four-week period last year. Total
motor gasoline imports (including both finished gasoline and gasoline blending components) last
week averaged 516,000 barrels per day, and distillate fuel imports averaged 209,000 barrels per
day.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve)
increased by 19 million barrels from the previous week. At 439.6 million barrels, U.S. crude oil
inventories are about 1% above the five year average for this time of year. Total motor gasoline
inventories increased by 4.1 million barrels from last week and are about 7% below the five year
average for this time of year. Finished gasoline and blending components inventories both
increased last week. Distillate fuel inventories decreased by 1.1 million barrels last week and are
about 18% below the five year average for this time of year. Propane/propylene inventories
decreased by 2.1 million barrels from last week and are 18% above the five year average for this
time of year. Total commercial petroleum inventories increased by 22.4 million barrels last
week.
Weather related refinery shutdowns caused the big increase in crude oil inventories, which are still at the bottom of the 5 year average.

Total products supplied over the last four-week period averaged 19.9 million barrels a day, down
by 4.3% from the same period last year. Over the past four weeks, motor gasoline product
supplied averaged 8.3 million barrels a day, down by 4.8% from the same period last year.
Distillate fuel product supplied averaged 3.6 million barrels a day over the past four weeks,
down by 5.5% from the same period last year. Jet fuel product supplied was down 0.8%
compared with the same four-week period last year.

Crude stocks at the Cushing, Okla., Nymex delivery hub rose by 2.5 million barrels for the week, the EIA said, while crude stocks in the Strategic Petroleum Reserve fell by 800,000 barrels.

Other market drivers
Meanwhile, the U.S. Energy Department last week rejected offers for purchases of crude to begin refilling the Strategic Petroleum Reserve, according to news reports. Crude had been finding support from expectations the government would move to repurchases crude for the SPR near $70 a barrel.

Trader conviction “is low given renewed hopes for a soft landing and optimism about China reopening (bullish) being weighed against economic uncertainties and growing concerns about the Department of Energy’s commitment to buy oil at $70/barrel due to funding and liquidity issues (bearish),” wrote analysts at Sevens Report Research in a Wednesday note.

The U.S. and its allies are also preparing their next round of sanctions on Russia’s oil industry, which are aimed at capping the sales prices of Russian exports of refined petroleum products. Some market watchers warn the move could squeeze global supply.

In meetings across Europe this week, officials are discussing the details of the coming sanctions on Russian oil products, which are set to go into effect on Feb. 5. The penalties would set two price limits on Russian refined products: one on high-value exports such as diesel and another on low-value ones such as fuel oil, The Wall Street Journal reported, citing people familiar with the plans.