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Refined Product Inventories Plummet, Demand Jumps
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 1.1 million barrels (MMbbl) to a total of 481.2 MMbbl. At 481.2 MMbbl, inventories are 67.8 MMbbl above last year (16.4%) and are about 8% above the five-year average for this time of year. Inventories in Cushing, OK, the NYMEX delivery point, fell 1.1 million barrels to a total of 36.8 million barrels. The Strategic Petroleum Reserve (SPR) was unchanged from the prior week and stands at 371.6 million barrels and stands 35.0% below the year ago level.
Domestic crude oil production rose 100,000 barrels per day to 12.3 million barrels per day, 700,000 bpd higher than the year ago period. While Alaska oil production was down 2,000bpd to 441,000bpd, production in the Lower 48 rose 100,000 barrels per day to 11.9 million barrels per day.
Gasoline inventories decreased by 6.4 million barrels (MMbbl) to a total of 229.6 MMbbl. At 229.6 MMbbl, inventories are down 8.4 MMbbl, or 3.5% lower than a year ago and are 4% below the five-year average for this time of year.
Here’s how individual regions and their gasoline inventory fared:
East Coast (-2.2 MMbbl)
Midwest (-1.0 MMbbl)
Gulf Coast (-3.1 MMbbl)
Rockies (+0.1 MMbbl)
West Coast (-0.2 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 3.3 million barrels to a total of 116.4 MMbbl. At 116.4 MMbbl, inventories are up 4.3 MMbbl, or 3.8% higher vs. a year ago. Distillate inventories stand about 9% below the five-year average for this time of year.
IMPLIED GASOLINE DEMAND:
Gasoline supplied to the market amounted to 8.96 million barrels per day (MMbpd), or 366,000 bpd higher than the previous week. So far in 2023, implied gasoline demand (“products supplied”) is 1.3% lower versus 2022, per the EIA.
Refinery utilization increased by 0.4 percentage points vs. last week’s numbers to reach 88.6%. Gasoline production increased to 9.5 million barrels per day while distillate fuel production increased to 4.5 million barrels per day last week.
Utilization rates for the last week were as follows:
East Coast: 68.0% (-9.9%)
Midwest: 88.7% (-4.7%)
Gulf Coast: 91.3% (+2.2%)
Rocky Mountains: 80.4% (-0.6%)
West Coast: 87.2% (+3.5%)
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 percent, the lower output — which has a direct impact on local gasoline prices. If refiners in your region have low output, you’re more likely to see gas prices rise.
Total oil stocks in the United States (excluding the SPR) are up by 111.2 MMbbl (9.8%) versus a year ago and stand at 1.248 billion barrels (excluding the Strategic Petroleum Reserve). Including the SPR, total stocks are down 88.6 million barrels (-5.2%) versus a year ago.
The U.S. imported 6.17 MMbpd of crude oil per day last week, down 45,000 bpd vs. the previous week, while crude oil exports fell by 95,000 bpd to 4.93 MMbpd. Total motor gasoline imports last week averaged 471,000 bpd. The U.S. also imported 222,000 bpd of distillate fuels. However, during the same timeframe, the U.S. exported 892,000 bpd of finished gasoline and 1,225,000 bpd of distillates. In total, U.S. companies exported 11.94 MMbpd of oil and petroleum products.
Before the report was released, the price of West Texas Intermediate crude oil was down 24 cents to $69.43 per barrel. Just after the report was released, oil was up 23 cents per barrel.
Refined product inventories saw a substantial dip, even as refinery utilization rose slightly. Gasoline inventories saw a very large 6+ million barrel decline, though as the transition to summer gasoline continues, a purge of winter gasoline can lead to large temporary declines in inventories. Total exports remained brisk, hitting nearly 12 million barrels per day, or nearly 84 million barrels in the last week, keeping refiners humming, while refinery utilization inched up, a sign that maintenance season is coming to a close for some refiners.