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“Multi-year lows for total crude supply and oil & products supply”

Summary:
Commenter and Blogger RJS, Perspective: I (RJS) suspect some of the inventory pullback has to do with tax strategies, but we’ve had all this sitting near multiyear lows going in, so they’re worth noting. I checked googled, & I don’t see anyone else reporting these lows, even at sites like oilprice.com. They’re probably on deadlines to get their articles done, and don’t have time to check the spreadsheets. Strategic Petroleum: Reserve at fresh 19 year low; total crude supplies fall to 118 month low, distillate supplies fall to a 21 month low, total oil & products supplies see largest drop in 63 months and end at a 7 1/2 year low US oil data from the US Energy Information Administration for the week ending December 24th showed that despite

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Commenter and Blogger RJS,

Perspective: I (RJS) suspect some of the inventory pullback has to do with tax strategies, but we’ve had all this sitting near multiyear lows going in, so they’re worth noting. I checked googled, & I don’t see anyone else reporting these lows, even at sites like oilprice.com. They’re probably on deadlines to get their articles done, and don’t have time to check the spreadsheets.

Strategic Petroleum: Reserve at fresh 19 year low; total crude supplies fall to 118 month low, distillate supplies fall to a 21 month low, total oil & products supplies see largest drop in 63 months and end at a 7 1/2 year low

“Multi-year lows for total crude supply and oil & products supply”

US oil data from the US Energy Information Administration for the week ending December 24th showed that despite increases in our oil imports and in our oil production, we still needed to pull oil out of our stored commercial crude supplies for the fifth week in a row for the 21st time in the past thirty-one weeks….our imports of crude oil rose by an average of 565,000 barrels per day to an average of 6,759,000 barrels per day, after falling by an average of 277,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 50,000 barrels per day to an average of 2,929,000 barrels per day during the week, which together meant that our effective trade in oil worked out to a net import average of 3,830,000 barrels of per day during the week ending December 24th, 515,000 more barrels per day than the net of our imports minus our exports during the prior week…over the same period, production of crude oil from US wells was reportedly 200,000 barrels per day higher at 11,800,000 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 have totaled an average of 15,630,000 barrels per day during the cited reporting week…

US oil refineries reported they were processing an average of 15,703,000 barrels of crude per day during the week ending December 24th, an average of 115,000 fewer barrels per day than the amount of oil that our refineries processed during the prior week, while over the same period the EIA’s surveys indicated that a net of 704,000 barrels of oil per day were being pulled out the supplies of oil stored in the US….so based on that reported & estimated data, this week’s crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports, from storage, and from oilfield production was 631,000 barrels per day more 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 inserted a (-631,000) 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 balance sheet fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus suggesting there must have been a error or omission of that magnitude in this week’s oil supply & demand figures that we have just transcribed…and since last week’s EIA fudge factor was at (-133,000) barrels per day, that means there was a 498,000 barrel per day difference between this week’s error and the EIA’s crude oil balance sheet error from a week ago, and hence the week over week supply and demand changes indicated by this week’s report are fairly useless…..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 oil wells, we’ll continue to report this data just as it’s published, and just as it’s 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)….

This week’s 704,000 barrel per day decrease in our total crude oil inventories left them at 1,015,023,000 barrels, the lowest level since February 10th 2012, or at a 118 month low….this week’s inventory drop came as 511,000 barrels per day were being pulled out of our commercially available stocks of crude oil, while 193,000 barrels per day of oil were pulled out of our Strategic Petroleum Reserve, part of the first installment from Biden’s plan to release 50 million barrels from the SPR, in order to incentive continued use of US gas guzzlers…however, most of that unrefined sour crude is expected to go to China and India, so how it could impact US gasoline prices is unclear… including the drawdowns from the Strategic Petroleum Reserve under such politically motivated programs, a total of 57,787,000 barrels have been removed from the Strategic Petroleum Reserve over the past 18 months, and as a result the amount of oil in our Strategic Petroleum Reserve has fallen to an 19 year low of 595,028,000 barrels per day, or to the lowest since November 29, 2002, as repeated tapping of our emergency supplies for political expediency or to “pay for” other programs had already drained those supplies over the past dozen years…based on an estimated prepandemic consumption level of 18 million barrels per day, the US will have roughly 30 1/2 days of oil supply left in the Strategic Petroleum Reserve when the Biden program is complete…

Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 6,481,000 barrels per day last week, which was still 13.7% more than the 5,698,000 barrel per day average that we were importing over the same four-week period last year….this week’s crude oil production was reported to be 200,000 barrels per day higher at 11,800,000 barrels per day because the EIA’s rounded estimate of the output from wells in the lower 48 states was 300,000 barrels per day higher at 11,400,000 barrels per day, while Alaska’s oil production was 5,000 barrels per day lower at 449,000 barrels per day and subtracted 100,000 barrels per day from the reported rounded national production total (by the EIA’s math)…US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was still 9.9% below that of our pre-pandemic production peak, but is now 40.0% 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…

US oil refineries were operating at 89.7% of their capacity while using those 15,703,000 barrels of crude per day during the week ending December 24th, up from a utilization rate of 89.6% the prior week, but still lower than the historical utilization rate for late December refinery operations…the 15,703,000 barrels per day of oil that were refined this week were 9.9% more barrels than the 14,287,000 barrels of crude that were being processed daily during the pandemic impacted week ending December 25th of last year, but 9.1% less than the 17,283,000 barrels of crude that were being processed daily during the week ending December 27th, 2019, when US refineries were operating at what was a more seasonal 94.5% of capacity…

Even with the decrease in oil being refined this week, the gasoline output from our refineries was somewhat higher, increasing by 171,000 barrels per day to10,113,000 barrels per day during the week ending December 24th, after our gasoline output had decreased by 100,000 barrels per day over the prior week.…this week’s gasoline production was 10.0% more than the 9,191,000 barrels of gasoline that were being produced daily over the same week of last year, but 0.6% less than the gasoline production of 10,173,000 barrels per day during the week ending December 27th, 2019….at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 83,000 barrels per day to 4,935,000 barrels per day, after our distillates output had increased by 40,000 barrels per day over the prior week…after that increase, our distillates output was 6.4% more than the 4,639,000 barrels of distillates that were being produced daily during the week ending December 25th, 2020, but 7.1% less than the 5,311,000 barrels of distillates that were being produced daily during the week ending December 27th, 2019..

Even with the increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the ninth time in twelve weeks, and for the fourteenth time in thirty-six weeks, decreasing by 1,459,000 barrels to 222,659,000 barrels during the week ending December 24th,after our gasoline inventories had increased by 5,533,000 barrels over the prior week…our gasoline supplies decreased this week because the amount of gasoline supplied to US users increased by 738,000 barrels per day to 9,724,000 barrels per day, and because our imports of gasoline fell by 256,000 barrels per day to 432,000 barrels per day, while our exports of gasoline fell by 207,000 barrels per day to 614,000 barrels per day…after this week’s inventory decrease, our gasoline supplies were 5.9% lower than last December 25th’s gasoline inventories of 236,562,000 barrels, and about 6% below the five year average of our gasoline supplies for this time of the year…

Likewise, even with the increase in our distillates production, our supplies of distillate fuels decreased for the thirteenth time in eighteen weeks and for the 26th time in 38 weeks, falling by 1,726,000 barrels to a 21 month low of 122,428,000 barrels during the week ending December 24th, after our distillates supplies had increased by 396,000 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 229,000 barrels per day to 3,882,000 barrels per day, and because our exports of distillatesroseby 116,000 barrels per day to 4,051,000 barrels per day, and because our imports of distillates fell by 41,000 barrels per day to 162,000 barrels per day….after twenty-six inventory decreases over the past thirty-eight weeks, our distillate supplies at the end of the week were 19.5% below the 152,029,000 barrels of distillates that we had in storage on December 25th, 2020, and about 14% below the five year average of distillates inventories for this time of the year…

Meanwhile, despite the increases in our oil imports and in our domestic oil production, our commercial supplies of crude oil in storage fell for the 14th time in 21 weeks and for the 34th time in the past year, decreasing by 3,576,000 barrels over the week, from 423,571,000 barrels on December 17th to 419,995,000 barrels on December 24th, after our commercial crude supplies had decreased by 4,715,000 barrels over the prior week…after this week’s decrease, our commercial crude oil inventories were about 7% below the most recent five-year average of crude oil supplies for this time of year, but were still 28.1% above the average of our crude oil stocks as of the fourth weekend of December 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 December 24th were 14.9% less than the 493,469,000 barrels of oil we had in commercial storage on December 18th of 2020, and are now 2.3% less than the 441,359,000 barrels of oil that we had in storage on December 27th of 2019, and also 4.9% less than the 441,418,000 barrels of oil we had in commercial storage on December 28th of 2018…

Finally, with our inventory of crude oil and our supplies of all products made from oil all near multi year lows, we are continuing to track the total of all U.S. Stocks of Crude Oil and Petroleum Products, including those in the SPR….the EIA’s data shows that total oil and oil product inventories, including those in the Strategic Petroleum Reserve and those held by the oil industry, and including everything from gasoline and jet fuel to propane/propylene and residual fuel oil, fell by 20,267,000 barrels this week, from 1,799,881,000 barrels on December 17th to 1,779,614,000 barrels on December 24th, the largest total inventory drop since September 30 2016, and left our total inventories at the lowest level since June 27th, 2014, or at a 7 1/2 year low… 

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