RJS: Focus on Fracking ________ Summary: US oil supplies at an 18 year low, SPR at a 36 year low, total oil + oil products supply at a 13½ year low. _________ Detail: The Latest US Oil Supply and Disposition Data from the EIA Sidenote: The US oil data reported this week by the US Energy Information Administration includes updated data for the week ending June 17th, which should have been published last week but wasn’t due to a hardware failure. The new data for the week ending June 24th is published on schedule this week. While we’re going to cover that most recent update as we usually do, we’ll also try to include the most important changes for the week ending June 17th in our narrative… The EIA’s data for the week ending June
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Angry Bear considers the following as important: EIA, Focus on Fracking, Oil, RJS, US/Global Economics
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RJS: Focus on Fracking
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Summary: US oil supplies at an 18 year low, SPR at a 36 year low, total oil + oil products supply at a 13½ year low.
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Detail: The Latest US Oil Supply and Disposition Data from the EIA
Sidenote: The US oil data reported this week by the US Energy Information Administration includes updated data for the week ending June 17th, which should have been published last week but wasn’t due to a hardware failure. The new data for the week ending June 24th is published on schedule this week. While we’re going to cover that most recent update as we usually do, we’ll also try to include the most important changes for the week ending June 17th in our narrative…
The EIA’s data for the week ending June 24th showed a big increase in our refinery throughput and a decrease in our oil imports. Even after the addition of more than a half million barrels per day in oil supplies that could not be accounted for and another big oil withdrawal from the SPR, we had to pull oil out of our stored commercial crude supplies for the 5th time in 7 weeks.
For the 19th time over the past 31 weeks our imports of crude oil fell by an average of 228,000 barrels per day to an average of 5,998,000 barrels per day, after falling by an average of 759,000 barrels per day during the week ending June 17th, while our exports of crude oil fell by 192,000 barrels per day to 3,380,000 barrels per day. After falling by 153,000 barrels per day during the prior week, which meant our trade in oil worked out to a net import average of 2,618,000 barrels of oil per day during the week ending June 24th, 36,000 fewer barrels per day than the net of our imports minus our exports during the week ending June 17th. Over the same period, production of crude from US wells reportedly rose by 100,000 barrels per day to 12,100,000 barrels per day, after being unchanged during the week ending June 17th, 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 14,718,000 barrels per day during the June 24th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 16,666,000 barrels of crude per day during the week ending June 24th, an average of 403,000 more barrels per day than the amount of oil than our refineries processed during the week ending June 17th. While over the same period the EIA’s surveys indicated that a net of 1,387,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US. This coming after an oil storage drawdown of 1,026,000 barrels of crude per day during the week ending June 17th.
So based on that reported & estimated data, the crude oil figures from the EIA for the week ending June 24th appear to indicate that our total working supply of oil from storage, from net imports and from oilfield production was 560,000 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 (+560,000) 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 they label in their footnotes as “unaccounted for crude oil”, thus suggesting there must have been an omission or error of 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 1,387,000 barrel per day decrease from our overall crude oil inventories left our total oil supplies at 913,434,000 barrels at the end of the week, our lowest oil inventory level since March 12th, 2004, and therefore at an 18 year low. Our oil inventory decreased this week as 395,000 barrels per day were being pulled out of our commercially available stocks of crude oil and 993,000 barrels per day of oil were being pulled out of our Strategic Petroleum Reserve, and came after 55,000 barrels per day were pulled out of our commercially available stocks and 971,000 barrels per day of oil were pulled out of our Strategic Petroleum Reserve during the week ending June 17th . . . those draws on the SPR would have included an 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 to address 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 158,279,000 barrels of oil have now been removed from the Strategic Petroleum Reserve over the past 23 months, and as a result the 497,868,000 barrels of oil still remaining in our Strategic Petroleum Reserve is now the lowest since April 25th, 1986, or at a 36 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 SPR releases….now the total 180,000,000 barrel drawdown expected over the current six month release program 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 fell to an average of 6,341,000 barrels per day last week, which was 5.1% less than the 6,683,000 barrel per day average 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 12,100,000 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 11,700,000 barrels per day, even as Alaska’s oil production was 25,000 barrels per day lower at 404,000 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 7.6% below that of our pre-pandemic production peak, but was 43.6% 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 95.0% of their capacity while using those 16,666,000 barrels of crude per day during the week ending June 24th, up from the 94.0% utilization rate during the week ending June 17th, and bit higher than the normal refinery utilization rate for early summer. The 16,666,000 barrels per day of oil refined this week were 2.3% more than the 16,299,000 barrels of crude that were being processed daily during week ending June 25th of 2021, but 3.9% less than the 17,337,000 barrels that were being refined during the pre-pandemic week ending June 21st, 2019, when refinery utilization was at a fairly normal 94.2% for late June…
With the increase in the amount of oil being refined this week, gasoline output from our refineries was also higher, increasing by 143,000 barrels per day to 9,497,000 barrels per day during the week ending June 24th, after our gasoline output had decreased by 665,000 barrels per day during the week ending June 17th…this week’s gasoline production was 0.8% less than the 9,926,000 barrels of gasoline that were being produced daily over the same week of last year, and 9.7% below our gasoline production of 10,512,000 barrels per day during the week ending June 21st, 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) increased by 85,000 barrels per day to 5,136,000 barrels per day, after our distillates output had increased by 93,000 barrels per day during the week ending June 17th…while our distillates output was 2.1% more than the 5,029,000 barrels of distillates that were being produced daily during the week ending June 25th of 2021, it was still 3.2% less than the 5,371,000 barrels of distillates that were being produced daily during the week ending June 21st, 2019…
With the increase in our gasoline production, our supplies of gasoline in storage at the end of the week rose for the second consecutive week, after falling 18 out of the prior 19 weeks. Increasing by 2,645,000 barrels to 221,608,000 barrels during the week ending June 24th, after our gasoline inventories had increased by 1,489,000 barrels during the week ending June 17th. Our gasoline supplies increased this week even though the amount of gasoline supplied to US users increased by 417,000 barrels per day to 8,922,000 barrels per day, after domestic gasoline supplied had fallen 588,000 barrels per day during the week ending June 17th, while our imports of gasoline rose by 41,000 barrels per day to 824,000 barrels per day, and while our exports of gasoline rose by 39,000 barrels per day to 969,000 barrels per day …but after 18 inventory drawdowns over the past 21 weeks, our gasoline supplies were still 8.3% lower than last June 25th’s gasoline inventories of 241,572,000 barrels, and 8% below the five year average of our gasoline supplies for this time of the year…
After the recent increases in our distillates production, our supplies of distillate fuels (diesel) increased for the 6th time in seven weeks and for the 16th time in forty-three weeks, rising by 2,559,000 barrels to 112,401,000 barrels during the week ending June 24th. After our distillates supplies had increased by133,000 barrels during the week ending June 17th, our distillates supplies rose by more this week than last because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 294,000 barrels per day to 3,568,000 barrels per day. While our exports of distillates rose by 35,000 barrels per day to 1,299,000 barrels per day, and while our imports of distillates rose by 2,000 barrels per day to 97,000 barrels per day….but after forty-two inventory withdrawals over the past sixty-three weeks, our distillate supplies at the end of the week were still 18.0% below the 137,076,000 barrels of distillates that we had in storage on June 25th of 2021, and still about 20% below the five year average of distillates inventories for this time of the year…
Meanwhile, with the increase in oil going to refineries and the decrease in our oil imports, and even after this week’s big release of crude from our Strategic Petroleum Reserve, our commercial supplies of crude oil in storage fell for the 7th time in 14 weeks and for the 32nd time in the past year, decreasing by 2,762,000 barrels over the week, from 418,328,000 barrels on June 17th to 415,566,000 barrels on June 24th, after our commercial crude supplies had decreased by 386,000 barrels over the week ending June 17th…after this week’s decrease, our commercial crude oil inventories remained about 13% below the most recent five-year average of crude oil supplies for this time of year, but about 18% above the average of our crude oil stocks as of the fourth 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 commercial 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 supplies as of this June 24th were 8.1% less than the 452,342,000 barrels of oil we had in commercial storage on June 25th of 2021, and were 22.1% less than the 533,527,000 barrels of oil that we had in storage on June 26th of 2020, and 11.3% less than the 468,491,000 barrels of oil we had in commercial storage on June 28th 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 602,000 barrels this week, from 1,679,111,000 barrels on June 17th to 1,678,509,000 barrels on June 24th, after our total inventories had fallen by 3,068,000 barrels during the week ending June 17th….that left our total liquids inventories down by 109,924,000 barrels over the first 25 weeks of this year, and at the lowest since October 24th, 2008, or at a 13 1/2 year low…