Welcome back to another Thirsty Thursday, the most entertaining hydrocarbon inventory report on the internet! This week we are drinking another holiday inspired cocktail, the Eggnog Cocktail. I know eggnog isn’t everyone’s favorite drink, but if you do enjoy it you are sure to enjoy this cocktail too! This cocktail is easy to make, parts eggnog, vodka, and amaretto, so mix it up and let’s get into this weeks inventory report.
The market was due for a swing in the other direction, and today that swing came, and boy did it ever! Not only did we depart from the month long pattern of draws, but the build this week is a large one at over 10 million barrels! Not only surprising for us at home, but apparently to those at the EIA too, they had forecasted a draw of over 3.5 million barrels.
The API also forecasted a decent sized draw of nearly 4 million barrels, but must have also been surprised when they went to fill in the actual column with a build of 7.8 million barrels. This weeks build has largely been attributed to weak global demand for oil, economies are slowing, particularly in China.
Another factor playing a part in this week’s over 10 million barrel draw is the SPR, which released 4.75 million of crude this week. Releases from the SPR are slowing, however, it has yet to be refilled.
Below you can clearly see this weeks build as it contrasts with the last 4 weeks of draws. This build is the largest in March of 2021. This weeks departure is also evident in the graph on the right.
Last week was all gloom and doom, it seemed oil prices were headed down and down. This week they recovered! Well, at least up until yesterday. Just today oil has fallen by about 2 dollars, likely due to the release of the EIA and API inventory reports.
The price of natural gas has also jumped this week, and is currently at $6.703.
Like oil inventory, gasoline is also up this week. Gasoline prices have followed the laws of supply and demand and are, much to the consumers delight, on average down this week.
The national average now sits at $3.193, right about the same it was this time last year. Gas in Hawaii is the only place where it is more than $5 a gallon, while in Texas it costs just $2.653 a gallon.
Diesel has become $0.17 cheaper this week and is, for the first time in a long time, now under $5 a gallon. Inventories of diesel are beginning to catch up to where they should be in the midst of slowing economies and a worsening COVID situation in China. Propane/propylene stocks have remained strong, although are flattening out the last 2 weeks or so.
That’s all for this week, have fun celebrating the holidays and hopefully some skiing if you’re in a state with mountains, drive safe and drink responsibly, cheers!
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