If readers are wondering what is the US doing to alleviate the rising prices of oil during the pandemic and the Russian invasion, RJS has written a good summation of what is going on in the US and where we might be during the drawdown of the SPR. It is dense reading due to the detail. RJS’s Summary; US oil supplies at a 14-year low; SPR at a 19½ year low; distillates exports at a 21 month high; total oil + products exports at a 2 year high The Latest US Oil Supply and Disposition Data from the EIA US oil data from the US Energy Information Administration for the week ending April 1st indicated that even after a big increase in our oil exports, we were able to add surplus oil to our stored commercial crude supplies for the 6th time in 19 weeks
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If readers are wondering what is the US doing to alleviate the rising prices of oil during the pandemic and the Russian invasion, RJS has written a good summation of what is going on in the US and where we might be during the drawdown of the SPR. It is dense reading due to the detail.
RJS’s Summary; US oil supplies at a 14-year low; SPR at a 19½ year low; distillates exports at a 21 month high; total oil + products exports at a 2 year high
The Latest US Oil Supply and Disposition Data from the EIA
US oil data from the US Energy Information Administration for the week ending April 1st indicated that even after a big increase in our oil exports, we were able to add surplus oil to our stored commercial crude supplies for the 6th time in 19 weeks and for the 15th time in the past forty-four weeks, mostly because of a big increase in oil supplies that the EIA could not account for . . . our imports of crude oil rose by an average of 41,000 barrels per day to an average of 6,300,000 barrels per day, after falling by an average of 227,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 705,000 barrels per day to 3,693,000 barrels per day during the week, after our exports had fallen by 856,000 barrels per day during the prior week…applying our oil exports to offset oil supplies coming from imports to get our effective trade in oil, we find there was a net import average of 2,607,000 barrels of per day during the week ending April 1st, 664,000 fewer 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 100,000 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 14,407,000 barrels per day during the cited reporting week…
Meanwhile, US oil refineries reported they were processing an average of 15,948,000 barrels of crude per day during the week ending April 1st, an average of 35,000 more barrels per day than the amount of oil than our refineries processed during the prior week, while over the same period the EIA’s surveys indicated that a net of 198,000 barrels of oil per day were being pulled out of 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 storage, from net imports and from oilfield production was 1,352,000 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 inserted a (+1,352,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet in order to make the reported data for the daily supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus suggesting there must have been an omission of that magnitude in this week’s oil supply & demand figures that we have just transcribed . . . moreover, since last week’s EIA fudge factor was at just (+20,000) barrels per day, that means there was a 1,332,000 barrel per day difference between this week’s balance sheet 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 completely worthless . . . 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 189,000 barrel per day decrease in our overall crude oil inventories left our total oil supplies at 978,272,000 barrels at the end of the week, the lowest inventory level since January 25th, 2008, and thus at a 14 year low . . . this week’s oil inventory decrease came even as 346,000 barrels per day were being added to commercially available stocks of crude oil, because 535,000 barrels per day of oil were being pulled out of our Strategic Petroleum Reserve at the same time . . . that draw on the SPR included the second withdrawal under the recently announced 30,000,000 million barrel release from the SPR to address Russian supply related shortfalls, as well as an ongoing withdrawal under the administration’s earlier plan to release 50 million barrels from the SPR to incentivize US gasoline consumption . . . including other withdrawals from the Strategic Petroleum Reserve under similar recent programs, a total of 91,569,000 barrels have now been removed from the Strategic Petroleum Reserve over the past 20 months, and as a result the 564,580,000 barrels of oil still remaining in our Strategic Petroleum Reserve is now the lowest since April 19th, 2002, or a few weeks short of a 20 year low. Repeated tapping of our emergency supplies for non-emergencies or to pay for other programs has already drained those supplies considerably over the past dozen years. With Biden’s recent announcement, an additional, unprecedented million barrels per day will be released from the SPR daily starting in May and running up to the midterm elections in November, in the hope of keeping gasoline and diesel prices lower up until that time . . . the total 180,000,000 barrel drawdown will remove almost a third of what remains in the SPR at this time, as the following graph illustrates…
The above graph comes from a post by oil and gas researcher Rory Johnston at Substack, wherein he discusses the implications of the planned SPR release, and it shows the historical quantity of oil held in our Strategic Petroleum Reserve, beginning from its inception following the Arab Oil Embargo of 1973-74 to the present day . . . the graph is further annotated to indicate the reasons for major additions to and withdrawals from the SPR, most of which were due to disruptions to oil supplies following hurricanes in the Gulf (you can get a better view of that by clicking on the graph, or even better yet, the enlarged version at substack.com . . . on the far right, Rory has projected where the strategic petroleum Reserve will end up after the Biden withdrawals are complete, which will take the SPR back to its level of 1983, while it was still being filled. Based on an estimated average daily US oil consumption of 18,000,000 barrels per day, the US will have roughly 18 1/2 days of oil supply left in the Strategic Petroleum Reserve this November, after all three of the Biden administration’s SPR withdrawal programs have run their course …
Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports slipped to an average of 6,360,000 barrels per day last week, which was 8.9% more than the 5,838,000 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 100,000 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 100,000 barrels per day higher at 11,400,000 barrels per day, while Alaska’s oil production rose by 3,000 barrels per day to 448,000 barrels per day, but had no impact on the final rounded national total . . . 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 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 92.1% of their capacity while using those 15,948,000 barrels of crude per day during the week ending March 25th, unchanged from the utilization rate of the prior week, and in line with the historical utilization rate for early April refinery operations, when spring refinery maintenance programs have just about finished up . . . the 15,948,000 barrels per day of oil that were refined this week were 6.0% more barrels than the 15,044,000 barrels of crude that were being processed daily during week ending April 2nd of 2021, when refineries were still recovering from winter storm Uri, and 17.0% more than the 13,634,000 barrels of crude that were being processed daily during the week ending March 27th, 2020, when US refineries were operating at what was then a much lower than normal 82.3% of capacity at the onset of the pandemic, but 0.9% less than the 16,100,000 barrels that were being refined during the week ending April 5th 2019, when there was no extraordinary circumstance affecting refineries at the time.
With an incremental increase in the amount of oil being refined this week, gasoline output from our refineries was also somewhat higher, increasing by 70,000 barrels per day to 9,124,000 barrels per day during the week ending April 1st, after our gasoline output had decreased by 750,000 barrels per day over the prior week . . . this week’s gasoline production was still 1.7% less than the 9,279,000 barrels of gasoline that were being produced daily over the same week of last year, and 10.3% less than the gasoline production of 10,169,000 barrels per day during the week ending April 5th, 2019, the year before the pandemic impacted demand . . . meanwhile, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 49,000 barrels per day to 5,042,000 barrels per day, after our distillates output had increased by 459,000 barrels per day over the prior three weeks . . . with those prior increases, our distillates output was 8.7% more than the 4,639,000 barrels of distillates that were being produced daily during the week ending April 2nd of 2021, and 0.1% above the 5,038,000 barrels of distillates that were being produced daily during the week ending April 5th, 2019…
Even with the increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the eighth time in nine weeks, decreasing by 2,041,000 barrels to 236,787,000 barrels during the week ending April 1st,after our gasoline inventories had increased by 785,000 barrels over the prior week . . . our gasoline supplies decreased this week because the amount of gasoline supplied to US users increased by 63,000 barrels per day to 8,562,000 barrels per day, and because our exports of gasoline rose by 372,000 barrels per day to 980,000 barrels per day, and because our imports of gasoline fell by 172,000 barrels per day to 484,000 barrels per day.…even with 8 inventory drawdowns over the past 9 weeks, our gasoline supplies were 0.9% higher than last April 2nd’s gasoline inventories of 234,588,000 barrels, and 1% below the five year average of our gasoline supplies for this time of the year…
Even with this week’s decrease in our distillates production, our supplies of distillate fuels increased for the third time in twelve weeks and for the tenth time in thirty-one weeks, rising by 771,000 barrels to 113,530,000 barrels during the week ending April 1st, after our distillates supplies had increased by 1,395,000 barrels during the prior week . . . our distillates supplies rose again this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 157,000 barrels per day to 3,647,000 barrels per day, even as our imports of distillates fell by 67,000 barrels per day to 88,000 barrels per day, and while our exports of distillates rose by 122,000 barrels per day to a 21 month high of 1,373,000 barrels per day. . . since oil and gasoline exports were also elevated this week, that meant that our total exports of oil and all products made from it reached a 2 year high of 9,631,000 barrels per day this week, and was also our third highest total exports on record…
Meanwhile, despite the jump in our oil exports, the increased withdrawal from the SPR meant our commercial supplies of crude oil in storage rose for the 13th time in 36 weeks and for the 19th time in the past year, increasing by 2,421,000 barrels over the week, from a 42 month low of 409,950,000 barrels on March 25th to 412,371,000 barrels on April 1st, after our commercial crude supplies had decreased by 3,449,000 barrels over the prior week . . . with this week’s increase, our commercial crude oil inventories remained about 14% below the most recent five-year average of crude oil supplies for this time of year, but were still about 28% above the average of our crude oil stocks as of the first of April 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 spring 2020, and then jumped again after last year’s winter storm Uri froze off Gulf Coast refining, our commercial crude oil supplies as of this April 1st were 17.2% less than the 498,313,000 barrels of oil we had in commercial storage on April 2nd of 2021, and were also 14.9% less than the 484,370,000 barrels of oil that we had in storage on April 3rd of 2020, and 9.7% less than the 456,550,000 barrels of oil we had in commercial storage on April 5th of 2019…
Finally, with our inventory of crude oil and our supplies of all products made from oil remaining near multi year lows, we are continuing to keep track of the total of all U.S. Stocks of Crude Oil and Petroleum Products, including those in the SPR . . . the EIA’s data shows that the total of our oil and oil product inventories, including those in the Strategic Petroleum Reserve and those held by the oil industry, and thus including everything from gasoline and jet fuel to propane/propylene and residual fuel oil, rose by 1,444,000 barrels this week, from 1,706,972,000 barrels on March 25th to 1,708,416,000 barrels on April 1st, after our total supply had decreased by 81,461,000 barrels over the first twelve months of this year . . . that increase still left our total supplies of oil & its products less than 1.5 million barrels above what would be an 8 year low dating back to April 4th, 2014…