RJS, Focus on Fracking Summary: Strategic Petroleum Reserve at a 20 year low, US oil supplies at a 14 year low; distillates supplies at a 14 year low, total oil + product inventories at an 13½ year low 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 22nd indicated that because of a drop in our oil exports and a big increase in oil that could not be accounted for, we managed to add oil to our stored commercial crude supplies for the 8th time in 22 weeks and for the 17th time in the past forty-seven weeks . . . our imports of crude oil rose by an average of 98,000 barrels per day to an average of 5,934,000 barrels per day, after falling by an average
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RJS, Focus on Fracking
Summary: Strategic Petroleum Reserve at a 20 year low, US oil supplies at a 14 year low; distillates supplies at a 14 year low, total oil + product inventories at an 13½ year low
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 22nd indicated that because of a drop in our oil exports and a big increase in oil that could not be accounted for, we managed to add oil to our stored commercial crude supplies for the 8th time in 22 weeks and for the 17th time in the past forty-seven weeks . . . our imports of crude oil rose by an average of 98,000 barrels per day to an average of 5,934,000 barrels per day, after falling by an average of 159,000 barrels per day during the prior week, while our exports of crude oil fell by 549,000 barrels per day to 3,721,000 barrels per day during the week, after our exports had risen by a record 2,090,000 barrels per day during the prior week…using our oil exports to offset oil supplies from imports to determine our effective trade in oil, we find there was a net import average of 2,213,000 barrels of oil per day during the week ending April 22nd, 647,000 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 unchanged at 11,900,000 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 14,113,000 barrels per day during the cited reporting week…
Meanwhile, US oil refineries reported they were processing an average of 15,684,000 barrels of crude per day during the week ending April 22nd, an average of 33,000 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 indicated that a net of 317,000 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 1,254,000 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 (+1,254,000) 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 . . . moreover, since last week’s EIA fudge factor was at (+433,000) barrels per day, that means there was a 821,000 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 317,000 barrel per day decrease in our overall crude oil inventories left our total oil supplies at 967,494,000 barrels at the end of the week, our lowest oil inventory level since January 4th, 2008, and thus a 14 year low . . . this week’s oil inventory decrease came even though 99,000 barrels per day were being added to our commercially available stocks of crude oil, because 416,000 barrels per day of oil were being pulled out of our Strategic Petroleum Reserve at the same time . . . that draw on the SPR included a withdrawal under the initial 30,000,000 million barrel release from the SPR to address Russian supply related shortfalls, as well as an earlier ongoing withdrawal under the administration’s 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 103,077,000 barrels have now been removed from the Strategic Petroleum Reserve over the past 21 months, and as a result the 553,070,000 barrels of oil still remaining in our Strategic Petroleum Reserve is now the lowest since January 18th, 2002, or at a 20 year low, as 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 “Plan to Respond to Putin’s Price Hike at the Pump”, an additional and unprecedented 1,000,000 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 fuel prices from rising further up until that time . . . that total 180,000,000 barrel drawdown over the next six months will remove almost a third of what remains in the SPR at this time…
Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 6,017,000 barrels per day last week, which was 0.3% less than the 6,034,000 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 unchanged at 11,900,000 barrels per day because the EIA’s rounded estimate of the output from wells in the lower 48 states was unchanged at 11,500,000 barrels per day, while Alaska’s oil production rose by 19,000 barrels per day to 447,000 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 9.1% below that of our pre-pandemic production peak, but was 41.2% 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 90.3% of their capacity while using those 15,684,000 barrels of crude per day during the week ending April 22nd, down from the 91.0% utilization rate of the prior week, but still close to the historical utilization rate for late April refinery operations . . . the 15,684,000 barrels per day of oil that were refined this week were 4.4% more barrels than the 15,018,000 barrels of crude that were being processed daily during week ending April 23rd of 2021, when refineries were still recovering from winter storm Uri, and 22.9% more than the 12,761,000 barrels of crude that were being processed daily during the week ending April 24th, 2020, when US refineries were operating at what was then a much lower than normal 69.6% of capacity during the first wave of the pandemic, but still 4.6% less than the 16,446,000 barrels that were being refined during the prepandemic week ending April 26th 2019, when refinery utilization was also at a somewhat below normal 89.2% for the same week of April…
With the decrease in the amount of oil being refined this week, gasoline output from our refineries was also lower, decreasing by 322,000 barrels per day to 9,514,000 barrels per day during the week ending April 22nd, after our gasoline output had increased by 335,000 barrels per day over the prior week . . . this week’s gasoline production was 1.2% less than the 9,629,000 barrels of gasoline that were being produced daily over the same week of last year, and 4.2% below the gasoline production of 9,927,000 barrels per day during the week ending April 19th, 2019, ie, the year before the pandemic impacted gasoline output . . . at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 34,000 barrels per day to 4,782,000 barrels per day, after our distillates output had increased by 162,000 barrels per day over the prior week . . . even with that decrease, our distillates output was 3.4% more than the 4,626,000 barrels of distillates that were being produced daily during the week ending April 23rd of 2021, but 6.7% less that the 5,128,000 barrels of distillates that were being produced daily during the week ending April 26th, 2019…
With the decrease in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the eleventh time in twelve weeks, decreasing by 761,000 barrels to 232,378,000 barrels during the week ending April 22nd,after our gasoline inventories had decreased by 761,000 barrels over the prior week . . . our gasoline supplies decreased again this week even though the amount of gasoline supplied to US users decreased by 129,000 barrels per day to 8,739,000 barrels per day, and even though our imports of gasoline rose by 248,000 barrels per day to 845,000 barrels per day while our exports of gasoline rose by 40,000 barrels per day to 958,000 barrels per day . . . but even with 11 inventory drawdowns over the past 12 weeks, our gasoline supplies were still only 1.8% lower than last April 23rd’s gasoline inventories of 234,982,000 barrels, and 4% below the five year average of our gasoline supplies for this time of the year…
Likewise, even with this week’s increase in our distillates production, our supplies of distillate fuels decreased for the twelfth time in fifteen weeks and for the 24th time in thirty-four weeks, falling by 1.449,000 barrels to a fourteen year low of 107,286,000 barrels during the week ending April 22nd, after our distillates supplies had decreased by2,642,000 barrels during the prior week . . . our distillates supplies fell again this week as the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 12,000 barrels per day to 3,834,000 barrels per day, and as our exports of distillates fell by 197,000 barrels per day to 1,281,000 barrels per day, and while our imports of distillates rose by 21,000 barrels per day to 125,000 barrels per day . . . after thirty-six inventory decreases over the past fifty-two weeks, our distillate supplies at the end of the week were 22.8% below the 139,049,000 barrels of distillates that we had in storage on April 23rd of 2021, and about 21% below the five year average of distillates inventories for this time of the year…
The depressed level of our distillate supplies has led to diesel fuel and heat oil prices that are often $1 per gallon more than the already elevated price of gasoline . . . supplies of diesel and pricing of it are also elevated in Europe and globally, leading to economic restrictions and power outages in countries that can’t afford it, such as Sri Lanka, Pakistan, and now India . . . although those diesel shortages had developed over time, the loss of Russian oil has exacerbated the situation, because refineries get more diesel per barrel oil out of a heavy crude than they do from a light one, and most Russian oil exports are medium heavy sour crudes . . . that global shortage of diesel also explains the thinking behind the 1 million barrel per day SPR release better than the administration’s political messaging about gasoline prices . . . for US Gulf Coast and European refineries that were built to use a medium heavy crude like Russian Urals, they need to find an equivalent grade of crude to replace it, or do some expensive blending of other grades to match it . . . remember that the administration’s first frantic moves after the Russian oil ban were to try to get Venezuelan oil and even Iranian oil back on the market to replace it?Well, the US Strategic Petroleum Reserve is 60% heavier grades of crude, so it appears that they’re pulling it out to partially replace embargoed Russian oil globally . . . most oil we get from shale is light and sweet, typically more expensive, but worthless when one is trying to replace Russian oil losses . . . and those losses also explain our rising exports to Europe..
Meanwhile, with this week’s drop in our oil exports, the withdrawal from the SPR, and the increase in oil supply that could not be accounted for, our commercial supplies of crude oil in storage rose for the 15th time in 39 weeks and for the 19th time in the past year, increasing by 691,000 barrels over the week, from 413,733,000 barrels on April 15th to 414,424,000 barrels on April 22nd, after our commercial crude supplies had decreased by 8,020,000 barrels over the prior week . . . but even with this week’s increase, our commercial crude oil inventories slipped to about 16% below the most recent five-year average of crude oil supplies for this time of year, but were still about 19% above the average of our crude oil stocks as of the fourth weekend 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 22nd were 16.0% less than the 493,107,000 barrels of oil we had in commercial storage on April 23rd of 2021, and were also 21.5% less than the 527,631,000 barrels of oil that we had in storage on April 24th of 2020, and 11.9% less than the 470,567,000 barrels of oil we had in commercial storage on April 26th 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 also 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 2,187,000 barrels this week, from 1,699,086,000 barrels on April 15th to 1,696,899,000 barrels on April 22nd, after our total inventories had fallen by 12,795,000 barrels during the prior week, thus leaving them down by 91,534,000 barrels over the first 12 weeks of this year . . . at 1,696,899,000 barrels our total inventories of oil & its products are now the lowest since December 26th, 2008, or at an 13 1/2 year low…