Thirsty Thursday: An Inventory Report (9/15/22)

Posted: September 17, 2022
Previous Reports

Welcome back to another Thirsty Thursday, the most entertaining hydrocarbon inventory report on the internet! This week’s commodity market is honestly a tad boring. No major swings in prices or levels, rather predictable really. That’s why this week’s cocktail is a vodka soda, while it is a classic, it is quite boring. I mean c’mon no flavor on top of no flavor… Whether you fancy it or not, it will pair nicely with this week’s ‘no flavor’ numbers.

Photo by Kitera Dent on Unsplash

The EIA foresaw a modest build of 0.833 million barrels this week and reported a build of 2.442 million barrels. There are only a few weeks left of Biden’s plan to drain 1 million barrels a day from the SPR which has been slightly shrouding what is actually happening with stock levels. It will be quite interesting to see the API and EIA reported numbers in October when the SPR is out of the question and a few months later when the plan to fill the SPR back up is underway.

Here is that little bit of flavor you were looking for, that hint of lime or grapefruit or what have you. The API expected a draw of 0.2 million barrels and must have been quite surprised with this week’s reported build of just over 6 million barrels. Is it just me or does it seem like both the API and EIA are usually quite modest in their forecasts and the reality that follows a week later is typically either much higher or lower than predicted? I’ll have to look into why that is; will report next week.

Do you hear that too? Oh yes, it’s the sound of the SPR stock tank level continuing to plummet for yet another week, I mean we expected this but still. It can be difficult to see from the chart but the most recent data point is from 6 days ago and is showing 434,057 thousand barrels or in simpler terms 434 million barrels. A week previous that number was 442.5 million barrels. If my math is correct that’s a difference of -8.5 million barrels, more than the 1 million per day per Biden’s plan.

This weeks U.S. Crude Oil Inventories according to the EIA

The bar chart above makes the every 2-3 week or so change in drawdown/build pattern quite visible and this week is no exception. If I was a gambling man I would venture to say that next week we can expect to see a slight to modest-sized drawdown. Now don’t blame us if you lose some money this week based on my amateur analysis, but if you did manage to make some money be sure to tune in next week for some more hasty predictions.

Still looking for more flavor in that vodka soda? Okay here’s that sprig of mint, WTI and Brent clawed their way out of the pits a tad this last week. Instead of continuing down what could have been a much darker path they both increased by about $2 over the past week. While it is still too early to tell whether oil will continue to slide into the low $ 80s or jump back over $100 it is promising for the time being.

Natural gas could have been the highlight of the week had it remained at its weekly high of $9.118, however, it has since come down to $8.387, still quite an increase from last week.

It can be hard to see but that little downward-sloping blue tick on the graph below depicts the last week’s drop in U.S. gasoline stocks, which makes a lot of sense given the direction it has been headed for the past 10 months or so. As we get to the tail end of the year stock levels also tend to dip so it’s all to be expected at this point.

California is winning the race that no one wants to, highest gas prices in the country! They continue to pull ahead of Hawaii for the second straight week with a state average of $5.439 per gallon. Mississippi brings up the rear at $3.135 per gallon. From what I understand Mississippi has such low gas prices due to low fuel taxes and the fact that they are so close to several refineries.

Distillate and propane stocks are on the rise this week! While it hasn’t cooled down yet here in Colorado or many of the other states, it feels like that time of the year is around the corner and that means only one thing, dropping distillate and propane stock levels. It seems as though distillate and propane stock is beginning to build ahead of those colder months, that may be where the pressure is coming from to try and get distillates back on track to be within the 5-year range.

While this week’s numbers were perhaps not the most exciting we here at Rare Petro do our best to make it entertaining. So join us again next week because whether or not there is something notable happening, you’ll want to read about it. Cheers!

Photo by Gary Meulemans on Unsplash

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