Welcome back to another Thirsty Thursday, the most entertaining hydrocarbon inventory report on the internet! As you likely noticed there was no Thirsty Thursday last week, due to the holiday we thought you would prefer filling up on turkey over reading about the latest inventory report data. Apologies if you’d have rather have the latter, either way we are back this week for an update! But first, you weekly cocktail is the Holly Jolly Christmas Citrus Cocktail, the first of several holiday themed drinks to be featured over the next month.
I thought the draw from 2 weeks ago was a big one, but it only pales in comparison to this week! As reported by the EIA there was a 12.5 million barrel draw this week. The EIA forecasted just -2.75 million barrels during the same time frame. Although we didn’t publish a report last week the EIA and API did release theirs a day before Thanksgiving, and I find it important to note there was also a draw last week, albeit a much smaller one at 3.69 million barrels.
The API also reported a large draw of 7.85 million barrels compared to their forecasted 2.487 million barrels. Last week they reported a draw of nearly 5 million barrels of crude. For those keeping track at home that’s 3 sizeable draws in a row.
The EIA also reported that inventories are about 8% below the 5-year average for this time of year. According to the EIA, refined petroleum product inventories such as gasoline are higher this week than they have been in the past few weeks, likely the reason crude stockpiles have dropped the past 3 weeks. Exported petroleum products are also holding strong this month.
SPR data hasn’t been updated just yet, however, the week ending November 25 saw 1.4 million barrels of oil released. The bar graph below makes the draws the last few weeks pretty clear, added up that’s nearly 22 million barrels over 3 weeks. With talks of more OPEC+ cuts, we could see a full month of crude oil draws. As previously stated we are below the 5-year average as far as crude inventories go, and quite far out of range at that too.
Oil price as of late has been more volatile than usual. Following losses largely due to an economic slowdown, oil prices have recovered nearly $10 in the past week! While there is still much uncertainty as the COVID situation in China continues to unravel, the oil inventory draw reported by the EIA has been the main driver behind the recent surge in oil price.
Natural gas made its recovery earlier in the week and has since come down from its weekly high sitting now at $6.842 which is -1.44% on the week.
Gas stockpiles are up and gas price is down. Refinery capacity is over 95% according to oilprice.com, in an attempt to bring down fuel prices, the Biden administration has tried to increase gasoline and diesel refining by as much as possible and for now it seems to be working.
The average national gas price decreased by 12 cents this past week and is now at $3.470. Diesel price practically remained the same, but technically decreased by 1 cent over the week. California has been knocked out of first place for most expensive gas in the country, Hawaii takes the title at $5.186 per gallon! Gas is cheapening in many of the southern states, where several are selling gas below $3, Texas has the cheapest at $2.836 on average.
It’s not only gasoline inventories that are trending upwards this week, but other refined products as well. Distillates, diesel, propane, and propylene have all had builds the past week. While it didn’t help much to bring diesel prices down, they at least aren’t going up anymore. Increased refining and slow demand should help distillates get back on their feet and they seem to be on track to enter the bottom of the 5-year average for December. Propane on the other hand is about to exit the top of their 5-year average!
That’s all for this week, have fun celebrating the holidays, drive safe and drink responsibly, cheers!
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