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Welcome to this week’s Thirsty Thursday: An Inventory Report. I hope it’s warmer where you are than it is here in Colorado. We had a few beautiful days but now it’s back to chilly, windy days. Despite the lack of Spring weather I thought it would be a good idea to mix up a Birds and Bees Cocktail. Here’s to hoping it invites some sunshine!
Crude Oil Stocks
Perhaps it’s everywhere besides Colorado that is getting good weather because the draw in crude inventories is indicative of high demand driven by people getting outside, driving their cars, and contributing to the economy. This week there was a 4.6 million barrel draw against the EIA’s forecast of just about 1 million barrels.
The API forecasted a much larger draw of 2.5 million barrels and reported a significantly lower value of 2.675 million barrels. It’s odd that their numbers differed from the EIA’s so much this week but as mentioned in a previous report the EIA is typically trusted over the API.
Based on the figure to the right, inventories of crude oil have been in decline for over a month now. Looking ahead and trying to predict whether we will see more draws or builds is difficult. On one hand, you have increased summer travel spurring demand and inventory draws, on the other hand, some of the world’s largest economies are leaving room for uncertainty when it comes to future demand. China in particular is where many people have their attention focused.
Oil and Natural Gas Prices
Welp, that didn’t last too long. The OPEC+ cuts worked to increase oil prices around the world for about 2 weeks, but lately, a strengthening dollar is killing those gains. Not only is the dollar wreaking havoc, but so too are fears of another Fed rate hike. The figures below speak for themselves, it was not a good week for oil as it fell about 2.5% or $5 over the last 7 days.
Natural gas provided us a bit more hope though; for the first time in a while, prices went up. After mid-week highs, natural gas is up $0.2 from the beginning of the week.
Fuels Market
On the fuels market side of things, prices and stocks are up. As refiners come back online they can pump out more gasoline. The increase in gasoline stocks drives the price down. Wait… but why is gas more expensive and getting increasingly more so? Honestly, I’m not too sure myself. It likely has something to do with some lag between inventories and prices as well as the temporary jump in oil prices. I’d expect gas prices to cool off in the coming weeks.
The price of a gallon of gas has increased by 7 to 10 cents per week for nearly a month, and this week’s increase of 10 cents is no different. For reference, a year ago today, the cost of gasoline was $4.066, so while it may seem expensive now, we aren’t nearing those extremes felt last year.
In the world of diesel and distillates, inventories are waning. A month or so after climbing back into the 5-year range, inventories are on their way to exceeding the lowest level seen during that range. Although counter-intuitive, diesel cheapened this week by an insignificant $0.009.
Crude Oil Imports/Exports
Imports and exports of crude last week are up, meaning we are importing more oil than we are exporting. While many people like to boast that the US recently became a net oil exporter, this is simply not true. We did reach out closest yet, however, in late March when exports hit an all-time high of 4.5 million barrels per day.
Exports soared the past month, helping to contribute to a healthy import/export ratio for the month, but in the past week have slowed down significantly.
US Weekly Import/Export Data (April 7 – 14)
| Product | Imports (Mbbl/d) | Exports (Mbbl/d) | Net (Mbbl/d) |
|---|---|---|---|
| Crude Oil | 6,294 | 4,571 | 1,723 |
| Other Petroleum Products | 2,244 | 6,513 | -4,269 |
| Total Oil + Products | 8,538 | 11,084 | -2,546 |
We have updated information on where our oil is coming from and where it’s going! It’s not like it’s from last month or anything, there seems to be about a 3-month delay, regardless I hope you find it as interesting as I do.
US Monthly Import/Export Origin and Destination Data (Month of January 2023)
| Export Destination | Total (Mbbl) | Import Origin | Total (Mbbl) |
|---|---|---|---|
| Mexico | 36,091 | Canada | 120,118 |
| Canada | 25,323 | Mexico | 22,179 |
| China | 23,972 | Saudi Arabia | 13,235 |
| Japan | 19,242 | Iraq | 7,823 |
| Netherlands | 18,661 | Nigeria | 5,693 |
That does it for this week, get out and enjoy the weather for me. See you next week!
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