RJS: EIA US Oil Supply and Disposition Report

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Angry Bear
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Summary: US oil supplies at a 17½ year low. SPR at a 35 year low after the SPR largest withdrawal on record. Gasoline supplies at a 6-month low.

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The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending June 10th show that after a big increase in our oil imports, another big oil withdrawal from the SPR, and an increase in oil supplies not accounted for more than covered a near record jump in our oil exports. We had oil left to add to our stored commercial crude supplies for the 7th time in 11 weeks, and for the 22nd time in the past 50 weeks, Our imports of crude oil rose by an average of 831,000 barrels per day to an average of 6,985,000 barrels per day, after falling by an average of 64,000 barrels per day during the prior week, while our  exports of crude oil rose by 1,493,000 barrels per day to 3,725,000 barrels per day, after falling by 1,758,000 barrels per day during the prior week, which meant that our trade in oil worked out to a net import average of 3,260,000 barrels of oil per day during the week ending June 10th, 622,000 fewer barrels per day than the net of our imports minus our exports during the prior week…over the same period, production of crude from US wells reportedly rose by 100,000 barrels per day to 12,000,000 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 15,260,000 barrels per day during the cited reporting week…

Meanwhile, US oil refineries reported they were processing an average of 16,320,000 barrels of crude per day during the week ending June 10th, an average of 67,000 fewer 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 indicate a net of 822,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US. 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 238,000 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 (+238,000) 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 error or omission of that magnitude in this week’s oil supply & demand figures that we have just transcribed….even so, 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 822,000 barrel per day decrease from our overall crude oil inventories left our total oil supplies at 930,326,000 barrels at the end of the week, our lowest oil inventory level since October 1st, 2004, and therefore a 17 1/2 year low. Our oil inventory decreased this week even though 279,000 barrels per day were being added to our commercially available stocks of crude oil, because 1,102,000 barrels per day of oil were being pulled out of our Strategic Petroleum Reserve, the largest SPR withdrawal on record, at the same time….that draw on the SPR would now include the initial emergency withdrawal under Biden’s “Plan to Respond to Putin’s Price Hike at the Pump”, that is expected to supply 1,000,000 barrels of oil per day to commercial interests from now up to the midterm elections in November, in the hope of keeping gasoline and diesel fuel prices from rising further at least up until that time, as well as the previous  30,000,000 million barrel release from the SPR addressing the initial Russian supply related shortfalls. The administration’s earlier plan to release 50 million barrels from the SPR to incentivize US gasoline consumption wrapped up in May, including that, and other withdrawals from the Strategic Petroleum Reserve under recent release programs. A total of 144,535,000 barrels of oil have now been removed from the Strategic Petroleum Reserve over the past 22 months, and as a result the 511,612,000 barrels of oil still remaining in our Strategic Petroleum Reserve is now the lowest since January 2nd, 1987, or at a 35 year low, as repeated tapping of our emergency supplies for non-emergencies or to pay for other programs had already drained those supplies considerably over the past dozen years, even before the Biden administration’s releases. So now, the total 180,000,000 barrel drawdown expected over the six months to November will remove almost a third of what remained in the SPR when the program started, and leave us with what would be less than a 20 day supply of oil at today’s consumption rate…

Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports rose to an average of 6,641,000 barrels per day last week, which was 2.2% more than the 6,322,000 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 12,000,000 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 11,600,000 barrels per day, even as Alaska’s oil production was 10,000 barrels per day lower at 435,000 barrels per day and has 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 8.4% below that of our pre-pandemic production peak, but was 42.4% 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 93.7% of their capacity while using those 16,320,000 barrels of crude per day during the week ending June 10th, down from the 94.2% utilization rate of the prior week, but still a typical refinery utilization rate for early summer. The 16,320,000 barrels per day of oil refined this week were a bit less than the 16,337,000 barrels of crude that were being processed daily during week ending June 11th of 2021, and 5.5% less than the 17,264,000 barrels that were being refined during the prepandemic week ending June 14th, 2019, when refinery utilization was also at a fairly normal 93.9% for the second weekend of June…

From the decrease in the amount of oil being refined this week, gasoline output from our refineries was also lower, decreasing by 21,000 barrels per day to 10,019,000 barrels per day during the week ending June 10th, after our gasoline output had increased by 73,000 barrels per day over the prior week. This week’s gasoline production was 0.9% more than the 9,926,000 barrels of gasoline that were being produced daily over the same week of last year, but 4.1% below our gasoline production of 10,451,000 barrels per day during the week ending June 14th, 2019, ie, during the year before the pandemic impacted US gasoline output….at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 57,000 barrels per day to 5,944,000 barrels per day, after our distillates output had increased by 17,000 barrels per day over the prior week…and our distillates output was 2.2% less than the 5,056,000 barrels of distillates that were being produced daily during the week ending June 11th of 2021, and 8.0% less than the 5,371,000 barrels of distillates that were being produced daily during the week ending June 14th, 2019…

With the recent increases in our gasoline production, supplies of gasoline in storage at the end of the week fell for the eighteenth time in nineteen weeks, decreasing by 710,000 barrels to a six month low of 217,474,000 barrels during the week ending June 10th, after our gasoline inventories had decreased by 812,000 barrels over the prior week. Our gasoline supplies decreased again this week even though the amount of gasoline supplied to US users decreased by 106,000 barrels per day to 9,093,000 barrels per day, because our imports of gasoline fell by 526,000 barrels per day to 650,000 barrels per day while our exports of gasoline fell by 31,000 barrels per day to 926,000 barrels per day …and after 18 inventory drawdowns over the past 19 weeks, our gasoline supplies were 10.5% lower than last June 11th’s gasoline inventories of 242,980,000 barrels, and 11% below the five year average of our gasoline supplies for this time of the year…

Even with the decrease in our distillates production, our supplies of distillate fuels increased for the 7th time in twenty-two weeks and for the 14th time in forty-one weeks. Distillates rose by 725,000 barrels to 109,709,000 barrels during the week ending June 10th. After our distillates supplies had increased by 2,592,000 barrels during the prior week, our distillates supplies rose by less this week even though the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 31,000 barrels per day to 3,619,000 barrels per day. Due to our exports of distillates rose by 178,000 barrels per day to 1,379,000 barrels per day, and because our imports of distillates fell by 62,000 barrels per day to 158,000 barrels per day….but after forty-two inventory withdrawals over the past sixty-one weeks, our distillate supplies at the end of the week were 19.4% below the 136,191,000 barrels of distillates that we had in storage on June 11th of 2021, and still about 23% below the five year average of distillates inventories for this time of the year… 

Meanwhile, after this week’s big release of crude from our Strategic Petroleum Reserve, our commercial supplies of crude oil in storage rose for the 12th time in 29 weeks and for the 20th time in the past year. Supply increasing by 1,956,000 barrels over the week from 416,758,000 barrels on June 3rd to   418,714,000 barrels on June 10th, after our commercial crude supplies had increased by 2,025,000 barrels over the prior week. After this week’s increase, our commercial crude oil inventories rose to 14% below the most recent five-year average of crude oil supplies for this time of year, and to about 18% above the average of our crude oil stocks as of the second weekend of June 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 US Gulf Coast refining, our commercial crude oil supplies as of this June 3rd were 10.3% less than the  466,674,000 barrels of oil we had in commercial storage on June 11th of 2021, and were 22.4% less than the 539,280,000 barrels of oil that we had in storage on June 12th of 2020, and 13.2% less than the  482,364,000 barrels of oil we had in commercial storage on June 14th of 2019…

Finally, with our inventories 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, fell by 2,764,000 barrels this week, from 1,684,943,000 barrels on June 3rd to 1,682,179,000 barrels on June 10th, after our total inventories had risen by 3,682,000 barrels during the prior week . . . leaving left our total liquids inventories down by 106,254,000 barrels over the first 23 weeks of this year, and less than one million barrels from a 13 1/2 year low..