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US crude supplies at 35 month low; Total oil and product supplies at 6 1/2 year low

Summary:
Commenter and Blogger RJS adds more detail to what I would suggest is a coming shortage of oil and oil products. Focus on Fracking US crude supplies at a 35 month low; total supplies of oil and all products made from it at a 6 1/2 year low… US oil data from the US Energy Information Administration for the week ending September 17th indicated that despite sizeable increases in our oilfield production and our oil imports, we still needed to withdraw oil from our stored commercial crude supplies for the 7th consecutive week, and for the 33rd time in the past forty-four weeks. Our  imports of crude oil rose by an average of 704,000 barrels per day to an average of 6,465,000 barrels per day, after falling by an average of 44,000 barrels per day

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Commenter and Blogger RJS adds more detail to what I would suggest is a coming shortage of oil and oil products.

Focus on Fracking US crude supplies at a 35 month low; total supplies of oil and all products made from it at a 6 1/2 year low…

US oil data from the US Energy Information Administration for the week ending September 17th indicated that despite sizeable increases in our oilfield production and our oil imports, we still needed to withdraw oil from our stored commercial crude supplies for the 7th consecutive week, and for the 33rd time in the past forty-four weeks.

US crude supplies at 35 month low; Total oil and product supplies at 6 1/2 year low

Our  imports of crude oil rose by an average of 704,000 barrels per day to an average of 6,465,000 barrels per day, after falling by an average of 44,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 185,000 barrels per day to an average of 2,809,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,656,000 barrels of per day during the week ending September 17th, 519,000 more barrels per day than the net of our imports minus our exports during the prior week . . . over the same period, the production of crude oil from US wells was reportedly 500,000 barrels per day higher at 10,600,000 barrels per day, and hence our daily supply of oil from the net of our international trade in oil and from domestic well production appears to total an average of 14,265,000 barrels per day during the cited reporting week…

US crude supplies at 35 month low; Total oil and product supplies at 6 1/2 year low

US oil refineries reported they were processing an average of 15,347,000 barrels of crude per day during the week ending September 17th. This is 960,000 more barrels per day than the amount of oil they processed during the prior week. While over the same period the EIA’s surveys indicated that an average of 669,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US . Based on reported & estimated data, this week’s crude oil figures from the EIA appear to indicate our total working supply of oil from net imports, from storage, and from oilfield production was 422,000 barrels per day less than what our oil refineries reported they used during the week.

To account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a (+422,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the daily supply of oil and the consumption of it balance out . . . essentially a fudge factor they label in their footnotes as “unaccounted for crude oil.” This suggests there must have been a error or omission of magnitude in this week’s oil supply & demand figures we have just transcribed; however, since most everyone treats these weekly EIA reports as gospel and since these figures often drive oil pricing and hence decisions to drill or complete wells, we’ll continue to report them as they’re published. And just as they’re watched & believed to be reasonably accurate by most everyone in the industry. (for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer) . . .

Additional details from the weekly Petroleum Status Report (pdf) indicate the 4 week average of our oil imports rose to an average of 6,094,000 barrels per day last week, which was 18.9% more than the 5,125,000 barrel per day average that we were importing over the same four-week period last year . . . the 669,000 barrel per day net decrease in our crude inventories included 497,000 barrels per day that were pulled out of our commercially available stocks of crude oil, and 172,000 barrels per day of oil that had been stored in our Strategic Petroleum Reserve, part of an emergency loan of oil to Exxon in the wake of hurricane Ida . . . this week’s crude oil production  was reported to be 500,000 barrels per day higher at 10,600,000 barrels per day because the EIA”s rounded estimate of the output from wells in the lower 48 states was 500,000 barrels per day higher at 10,200,000 barrels per day, while a 8,000 barrel per day increase in Alaska’s oil production to 429,000 barrels per day had no impact on the reported rounded national production total . . . US crude oil production had hit a pre-pandemic record high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was 19.1% below that of our pre-pandemic production peak, but still 25.8% above the interim low of 8,428,000 barrels per day that US oil production had fallen to during the last week of June of 2016…

Meanwhile, US oil refineries were operating at 87.5% of their capacity while using those 15,347,000 barrels of crude per day during the week ending September 10th, up from 82.1% of capacity the prior week, but still a bit below normal utilization for early autumn refinery operations . . . while the 15,347,000 barrels per day of oil that were refined this week were 14.8% more barrels than the 13,370,000 barrels of crude that were being processed daily during the pandemic impacted week ending September 18th of last year, they were 7.1% below the 16,513,000 barrels of crude that were being processed daily during the week ending September 20th, 2019, when US refineries were operating at what was then a near normal 89.8% of capacity . . .

With this week’s increase in the amount of oil being refined, the gasoline output from our refineries was also higher, increasing by 372,000 barrels per day to9,643,000 barrels per day during the week ending September 17th, after our gasoline output had decreased by 851,000 barrels per day over the prior week . . . while this week’s gasoline production was 3.5% higher than the 9,315,000 barrels of gasoline that were being produced daily over the same week of last year, it was 5.8% lower than the gasoline production of 10,240,000 barrels per day during the week ending September 20th, 2019 . . . at the same time, our refineries’  production of distillate fuels (diesel fuel and heat oil) increased by 298,000 barrels per day to 4,454,000 barrels per day, after our distillates output had decreased by 29,000 barrels per day over the prior week . . . but even after this week’s increase, our distillates output was a bit less than the 4,470,000 barrels of distillates that were being produced daily during the week ending September 18th, 2020, and 10.9% below the 5,000,000 barrels of distillates that were being produced daily during the week ending September 20th, 2019..

With the big increase in our gasoline production, our supply of gasoline in storage at the end of the week increased for the tenth time in twenty-four weeks, and for the 19th time in forty-four weeks, rising by 3,474,000 barrels to 221,616,000 barrels during the week ending September 17th, after our gasoline inventories had decreased by  1,857,000 barrels over the prior week . . . our gasoline supplies increased this week even though the amount of gasoline supplied to US users rose by 4,000 barrels per day to 8,896,000 barrels per day because our imports of gasoline rose by 444,000 barrels per day to 1,082,000 barrels per day while our exports of gasoline fell by 13,000 barrels per day to 621,000 barrels per day . . . even after this week’s inventory increase, our gasoline supplies were 2.6% lower than last September 18th’s gasoline inventories of 227,499,000 barrels, and about 3% below the five year average of our gasoline supplies for this time of the year…

Even with the increase in our distillates production, our supplies of distillate fuels  decreased for the sixteenth time in twenty-four weeks and for the 20th time in 40 weeks, falling by 2,554,000 barrels to 131,897,000 barrels during the week ending September 17th,after our distillates supplies had decreased by 1,689,000 barrels during the prior week . . . our distillates supplies fell this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 629,000 barrels per day to 4,424,000 barrels per day, while our imports of distillates  rose by 20,000 barrels per day to 184,000 barrels per day and even though our exports of distillates fell by 188,000 barrels per day to a 28 week  low of 579,000 barrels per day…after sixteen inventory decreases over the past twenty-four weeks, our distillate supplies at the end of the week were 26.5% below the 175,942,000 barrels of distillates that we had in storage on September 18th, 2020, and about 14% below the five year average of distillates stocks for this time of the year…

With oil refining recovering from Ida faster than our oil production has, our  commercial supplies of crude oil in storage fell for the sixteenth time in eighteen weeks and for the 36th time in the past year, decreasing by 3,481,000 barrels over the week, from 417,445,000 barrels on September 10th to a 35 month low of  413,964,000 barrels on September 17th, after our commercial crude supplies had decreased by 6,422,000 barrels the prior week . . . after this week’s decrease, our commercial crude oil inventories were about 8% below the most recent five-year average of crude oil supplies for this time of year, but were still about 26% above the average of our crude oil stocks after the third week of September over the 5 years at the beginning of the past decade, with the disparity between those comparisons arising because it wasn’t until early 2015 that our oil inventories first topped 400 million barrels . . . since our crude oil inventories had jumped to record highs during the Covid lockdowns of last spring and remained elevated for most of the year after that, our commercial crude oil  supplies as of this September 18th were 16.3% less than the 494,406,000 barrels of oil we had in commercial storage on September 19th of 2020, and are now 1.3% less than the 419,538,000 barrels of oil that we had in storage on September 20th of 2019. Still the supply is 4.5% more than the  395,989,000 barrels of oil we had in commercial storage on September 21st of 2018…

Finally, with our inventory of crude oil and and our supplies of all products made from oil, we’re also going to check the total of all U.S. Stocks of Crude Oil and Petroleum Products, including those in the SPR . . . we find total inventories, including those in the Strategic Petroleum Reserve and those held by the oil industry, down by 3,788,000 barrels this week, from 1,845,415,000 barrels on September 10th to 1,841,627,000 barrels on September 17th, 

which is the lowest since March 6th, 2015, and

Hence a 6 1/2 year low.

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