Oil Inventories Bounce Back, SPR Refills Start

The Energy Information Administration (EIA) released its weekly report today on the status of petroleum inventories in the United States. Here are some highlights:

CRUDE OIL INVENTORIES:

Crude oil inventories increased by 5.9 million barrels (MMbbl) to a total of 445.6 MMbbl. At 445.6 MMbbl, inventories are 1362 MMbbl above last year (3.2%) and are 0% below the five-year average for this time of year. Inventories in Cushing, OK, the NYMEX delivery point, fell 0.1 million barrels to a total of 34.4 million barrels. The Strategic Petroleum Reserve (SPR) rose 1 million barrels (0.3%) from the prior week and stands at 347.8 million barrels, 25.1% below the year ago level.

Domestic crude oil production jumped 400,000bpd due to an adjustment to 12.6 million barrels per day, 400,000 bpd higher than the year ago period. Alaska oil production fell 16,000 barrels to 377,000bpd, while production in the Lower 48 rose 400,000 bpd to 12.2 million barrels per day.

GASOLINE INVENTORIES:

Gasoline inventories decreased by 2.7 million barrels (MMbbl) to a total of 216.4 MMbbl. At 216.4 MMbbl, inventories are down 3.9 MMbbl, or 1.8% lower than a year ago and are 7% below the five-year average for this time of year.

Here’s how individual regions and their gasoline inventory fared:
East Coast (-0.7 MMbbl)
Midwest (-0.6 MMbbl)
Gulf Coast (-1.5 MMbbl)
Rockies (+0.0 MMbbl)
West Coast (+0.1 MMbbl)

It’s important to note which regions saw increases/decreases as this information likely drives prices up (in the case of falling inventories) or down (in the case of rising inventories).

DISTILLATE (DIESEL, HEATING OIL) INVENTORIES:

Distillate inventories decreased by 1.7 million barrels to a total of 115.4 MMbbl. At 115.4 MMbbl, inventories are up 4.0 MMbbl, or 3.5% higher vs. a year ago. Distillate inventories stand about 17% below the five-year average for this time of year.

IMPLIED GASOLINE DEMAND:

Gasoline supplied to the market amounted to 9.30 million barrels per day (MMbpd), or 464,000 bpd higher than the previous week. So far in 2023, implied gasoline demand (“products supplied”) is 1.7% higher versus 2022, per the EIA.

REFINERY OUTPUT/UTILIZATION:

Refinery utilization increased by 1.1 percentage points vs. last week’s numbers to reach 93.8%. Gasoline production increased to 9.9 million barrels per day while distillate fuel production increased to 4.9 million barrels per day last week.

Utilization rates for the last week were as follows:
East Coast: 88.9% (-2.3%)
Midwest: 95.4% (+3.6%)
Gulf Coast: 94.6% (-0.2%)
Rocky Mountains: 91.3% (+3.6%)
West Coast: 90.5% (+2.9%)

These percentages show how much of a region’s overall capacity was used to refine oil. It’s important to note these percentages because the lower the utilization percentage, the lower output, which has a direct impact on local gasoline prices. If refiners in your region have lower or falling utilization rates, you’re more likely to see gas prices rise.

OVERALL SUPPLY:

Total oil stocks in the United States (excluding the SPR) are up by 51.2 MMbbl (4.2%) versus a year ago and stand at 1.273 billion barrels (excluding the Strategic Petroleum Reserve). Including the SPR, total stocks are down 65.6 million barrels (-3.9%) versus a year ago.

IMPORTS/EXPORTS:

The U.S. imported 6.68 MMbpd of crude oil per day last week, up 14,000 bpd vs. the previous week, while crude oil exports fell by 2,923,000 bpd to 2.36 MMbpd. Total motor gasoline imports last week averaged 684,000 bpd. The U.S. also imported 65,000 bpd of distillate fuels. However, during the same timeframe, the U.S. exported 941,000 bpd of finished gasoline and 1,458,000 bpd of distillates. In total, U.S. companies exported 8.77 MMbpd of oil and petroleum products.

Before the report was released, the price of West Texas Intermediate crude oil was up $1.15 to $84.07 per barrel. Just after the report was released, oil was up $1.26 per barrel.