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Welcome to this week’s Thirsty Thursday: An Inventory Report. Is it feeling like Spring yet where you live? It sure is over here in Colorado, at least the past few days have been pretty warm and full of sunshine. Although we’re likely to get another snowstorm or two before the real Spring comes I say we celebrate with a Spring inspired cocktail this week, the Spring Buzz. A flowery drink with parts tea and whiskey, but where the Spring theme is really tied in is in the addition of honey. Maybe it’ll put you to sleep, but not this week’s inventory report sure won’t!
Crude Oil Stocks
Well, I didn’t hit on my bet from last week, however, we are seeing another build, at least that much was correct. The EIA’s conservative forecast was just under half a million barrels while they reported an actual value of 1.165 million barrels. Not nearly the 8 or so million I had in mind last week.
The API forecasted a similar number, however, reported a much larger actual build of over 6 million barrels! I’m not exactly sure what the reason is behind the discrepancy this week but most people tend to lean toward the EIA for accuracy.
I’m beginning to sense somewhat of a pattern in the bar graph below; small build, small build, very large build, medium build, small build, repeat. If the pattern holds another week we may see a 4-5 million barrel build.
Oil and Natural Gas Prices
There we go; this so more along the lines of how we like our oil price graphs to look, moving upwards! Both Brent and WTI have jumped about $3 this week. Brent continues to run about $6-8 more than WTI. Between fears of a global economic slowdown and a steady supply and optimism about Chinese oil demand, the latter seems to have won out. Oil is riding the optimism wave despite build after build after build, at least here in the US.
Russia seems to be exporting a sizeable amount of oil despite current sanctions as well as an EU-issued price cap, disrupting the international oil market. On the other hand, they are still refraining from opening up Nordstream to full capacity. As of a few days ago, it seems they are supplying a ‘critical’ volume of gas to Germany, which hasn’t quite shaken up the natural gas market as much as the oil market. Natural gas had its first good week in several, gaining roughly 30 cents.
Fuels Market
Gasoline stocks drop for a consecutive week as gasoline prices edge lower. We have lots of oil here in the US as evidenced by the 10 straight weeks of builds, it’s just a question of whether or not that crude oil can be refined at a reasonable rate.
Gas has become 2 cents cheaper this week, yay. There is a nearly $2 spread between gasoline in Hawaii/Alaska/California and Texas/Missouri/Mississippi. In the next few weeks we may begin to see a slight increase in gas prices as the summer blend is rolled out across the country, which is more expensive than the winter blend.
Diesel dropped 7 cents this week while diesel stock rose ever so slightly. Propane/propylene stocks are just riding the wave.
Crude Oil Imports/Exports
A new section of the report, I thought some insight into the US’s oil imports and exports would be good to cover, so here is a first take at presenting that data to you. First the big picture. Below we are looking at US crude oil imports, exports, and net beginning in 2019 and up to last week.
Zooming in on just this week; while net crude imports/exports are positive, other petroleum products exports heavily outweigh imports this week, bringing the net imports/exports into negative territory.
US Weekly Import/Export Data (Feb 17 – 24)
| Product | Imports (Mbbl/d) | Exports (Mbbl/d) | Net (Mbbl/d) |
|---|---|---|---|
| Crude Oil | 6,456 | 4,068 | 2,388 |
| Other Petroleum Products | 2,289 | 5,953 | -3,665 |
| Total Oil + Products | 8,745 | 10,021 | -1,277 |
Finally, where are those exports going and where are the imports coming from? Below are monthly total crude oil and products data for December, the latest month there is data for.
US Monthly Import/Export Origin and Destination Data (December 2022)
| Export Destination | Total (Mbbl) | Import Origin | Total (Mbbl) |
|---|---|---|---|
| Mexico | 36,952 | Canada | 128,962 |
| Canada | 24,776 | Mexico | 23,618 |
| Netherlands | 22,233 | Saudi Arabia | 18,763 |
That does it for this week. I hope everyone has a great weekend and we’ll see you next week, cheers!
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