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Welcome to this week’s Thirsty Thursday: An Inventory Report. We are now more than half-way done with Q2 2023, and with April’s showers having brought May flowers, it may be time to celebrate the last few weeks of spring with a Lavender Lasso.
Crude Oil Stocks
The EIA forecasted a million-barrel drop in inventories for the period but was met with a surprise inventory build of considerable size (5 million barrels).
The API also expected an even larger draw than the EIA but also reported a significant, though slightly lesser, inventory build.
This and last week’s surprise inventory builds could exert downward pressure on commodity prices. The last two reporting periods reverse the inventory depletion trend that the country has been seeing since March of this year.
Oil and Natural Gas Prices
Brent continues to hover at around $75/bbl and WTI, with some variation, has been staying just over the $70/bbl mark. With inventory trends changing direction and rig counts falling meaningfully, it seems as though commodity prices are in somewhat of a holding pattern.
Natural gas has rallied back over the $2.50/MMBtu mark, driven in some degree by Californian wildfires preventing the import of some amount of Canadian gas.
Fuels Market
National average gasoline prices stayed nearly flat in the last period at $3.54. US gasoline stocks have once again turned downwards and remain beneath the five-year range of national gasoline inventories.
Mississippi remains the only state in the Union to have sub-$3 gasoline on average, while California ends the other end of the price spectrum at $4.80.
Diesel prices continue their inexorable downward march and diesel stocks continue to get slimmer, with inventories at the very bottom of the five-year range. Propane inventories, by contrast, continue to build and are on top of the five-year range.
Crude Oil Imports/Exports
Net crude oil imports were down just over 100K bbl/d from the last reporting period, but remain about 1 MMbbl/d higher than most of April was. This seems to be dominated largely by a drop in exports–imports seem fairly stable.
The overall trend of the last three months seems to be moving away from the zero net import/export mark, but the macrotrend towards oil independence still seems to continue.
US Weekly Import/Export Data (May 6-12)
| Product | Imports (Mbbl/d) | Exports (Mbbl/d) | Net (Mbbl/d) |
|---|---|---|---|
| Crude Oil | 6,860 | 4,310 | 2,550 |
| Other Petroleum Products | 2,022 | 6,496 | -4,474 |
| Total Oil + Products | 8,881 | 10,806 | -1,925 |
US Monthly Import/Export Origin and Destination Data (Month of February 2023)
| Export Destination | Total (Mbbl) | Import Origin | Total (Mbbl) |
|---|---|---|---|
| Mexico | 32,296 | Canada | 113,636 |
| China | 26,757 | Mexico | 22,108 |
| Canada | 23,704 | Saudi Arabia | 10,863 |
| South Korea | 18,213 | Iraq | 8,352 |
| Japan | 17,326 | Colombia | 5,621 |
That’s it for this week. Get out and enjoy that beautiful spring weather!
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