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Welcome to this week’s Thirsty Thursday: An Inventory Report. Celebrate the Mexican victory over Napoleon III at the Battle of Puebla in 1862 by sipping an ice-cold Oaxaca Old Fashioned cocktail. Viva summer, viva Mexico, and viva oil and gas!
Crude Oil Stocks
The EIA reported a larger-than-expected draw of 1.28 million barrels, down from last week’s 5 million-barrel draw.
The API reported a much larger-than-expected draw of nearly 4 million barrels, forecasting an only 1 million-barrel draw.
Inventories continue their recent trend downwards but seem to be having little effect on commodity prices. Rig activity in the US seems to have leveled off (and is slightly decreasing), providing part of the answer as to why inventories are slipping.
Oil and Natural Gas Prices
Oil prices dipped below $70/bbl again this week for the first time since December of 2021, excepting a few days in March of this year. The dip in commodity prices seems to be fueled by the threat of increasing interest rates and comes despite stalling rig counts, faltering domestic inventories, and OPEC production cuts.
Natural gas, after stepping slightly higher last week, has been falling back to just above $2.00/mmbtu (Henry Hub). Swelling supply, warmer springtime weather, and no immediate additions of LNG export capacity continue to depress gas prices.
Fuels Market
Gasoline prices continue their choppy but steadily downward trend, and diesel prices continue their nearly linear downward trend for the year. Gasoline stocks continue to be lesser than in any of the previous five years, possibly due to refining capacity, but are presently not conspicuously lower than the range in previous years.
The price of a gallon of gas has dropped one cent on average across the country this week. Gasoline in the Western states remains ~85 cents per gallon cheaper on average than gasoline in the Southern states.
Diesel, after a long, linear march downward from highs in 2022, is entering the price range and price disparity relative to gasoline that was common before COVID, perhaps heralding an end to the diesel supply and cost crisis. This being said, both gasoline and diesel stocks remain lower that in previous years.
Crude Oil Imports/Exports
The United States continues to inch towards being a net crude exporter as it sells crude to Mexico, NATO allies, China, and a few other commercial partners. However, imports from Canada and a few other countries continue to outweigh crude oil exports.
The trend towards becoming a net oil exporter continued this week and, if trend-ology is to be believed, looks to be accomplished within a decade.
US Weekly Import/Export Data (April 22 – 28)
| Product | Imports (Mbbl/d) | Exports (Mbbl/d) | Net (Mbbl/d) |
|---|---|---|---|
| Crude Oil | 6,396 | 4,737 | 1,659 |
| Other Petroleum Products | 4,951 | 5,920 | -3,969 |
| Total Oil + Products | 8,348 | 10,657 | -2,309 |
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 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 does it for this week, get out and celebrate the great United Mexican States. See you next week!
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