RJS: Focus on Fracking Summary: US oil supplies at a 17 ½ year low with SPR at a 34½ year low; gasoline exports at a 3½ year high; 4 weeks of total oil + product exports at a record high and leads to total oil + products supply at a 13½ year low total oil + product supplies at a 13½ year low after record exports.. The Latest US Oil Supply and Disposition Data from the EIA US oil data from the US Energy Information Administration for the week ending May 27th indicated that even after another big oil withdrawal from the SPR, we had to pull oil out of our stored commercial crude supplies for the 4th time in 9 weeks, and for the 27th time in the past 47 weeks, mostly because of a big decrease in oil supplies that could not be accounted for.
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RJS: Focus on Fracking
Summary: US oil supplies at a 17 ½ year low with SPR at a 34½ year low; gasoline exports at a 3½ year high; 4 weeks of total oil + product exports at a record high and leads to total oil + products supply at a 13½ year low total oil + product supplies at a 13½ year low after record exports..
The Latest US Oil Supply and Disposition Data from the EIA
US oil data from the US Energy Information Administration for the week ending May 27th indicated that even after another big oil withdrawal from the SPR, we had to pull oil out of our stored commercial crude supplies for the 4th time in 9 weeks, and for the 27th time in the past 47 weeks, mostly because of a big decrease in oil supplies that could not be accounted for. Our imports of crude oil fell by an average of 266,000 barrels per day to an average of 6,218,000 barrels per day, after falling by an average of 82,000 barrels per day during the prior week, while our exports of crude oil fell by 351,000 barrels per day to 3,990,000 barrels per day, after rising by 821,000 barrels per day to a 26 month high of 4,341,000 barrels per day during the prior week . . . together, that meant that our trade in oil worked out to a net import avg of 2,228,000 barrels of oil per day during the week ending May 27th, 83,000 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 14,128,000 barrels per day during the cited reporting week…
Meanwhile, US oil refineries reported they were processing an average of 16,033,000 barrels of crude per day during the week ending May 27th, an average of 236,000 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 1,498,000 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 406,000 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 (+406,000) 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 unaccounted for oil factor was at (+1,225,000) barrels per day, that means there was a 819,000 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 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)….
Week’s 1,498,000 barrel per day decrease in our overall crude oil inventories left our total oil supplies at 941,325,000 barrels at the end of the week, our lowest oil inventory level since October 22nd, 2004, and thus a 17 1/2 year low. This week’s oil inventory decrease came as 724,000 barrels per day were being pulled our commercially available stocks of crude oil, while 774,000 barrels per day of oil were being pulled out of our Strategic Petroleum Reserve 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 up until that time, as well as the previous 30,000,000 million barrel release from the SPR to address Russian supply related shortfalls, and 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 recent release programs, a total of 129,555,000 barrels of oil have now been removed from the Strategic Petroleum Reserve over the past 22 months, and as a result the 526,592,000 barrels of oil still remaining in our Strategic Petroleum Reserve is now the lowest since June 19th, 1987, or nearly 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….now, the total 180,000,000 barrel drawdown expected over the next six months will remove almost a third of what remains in the SPR, 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 6,385,000 barrels per day last week, which was still 7.3% more than the 5,951,000 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 even though the EIA’s rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day higher at 11,500,000 barrels per day, because Alaska’s oil production was 10,000 barrels per day lower at 450,000 barrels per day and thus subtracted 100,000 barrels per day from the final rounded national total (by the EIA’s math, not mine)…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 9.2% 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 92.6% of their capacity while using those 16,033,000 barrels of crude per day during the week ending May 27th, down from the 93.2% utilization rate of the prior week, but a fairly normal refinery utilization rate for early summer, The 16,033,000 barrels per day of oil that were refined this week were 2.8% more barrels than the 15,597,000 barrels of crude that were being processed daily during week ending May 28th of 2021, and 20.5% more than the 13,307,000 barrels of crude that were being processed daily during the week ending May 29th, 2020, when US refineries were operating at what was then a much lower than normal 71.8% of capacity during the first wave of the pandemic, but still 5.3% less than the 16,938,000 barrels that were being refined during the prepandemic week ending May 31st, 2019, when refinery utilization was at a fairly normal 91.8% for the last weekend of May…
Even with the decrease in the amount of oil being refined this week, gasoline output from our refineries was much higher, increasing by 545,000 barrels per day to 9,968,000 barrels per day during the week ending May 27th, after our gasoline output had decreased by 151,000 barrels per day over the prior week.…this week’s gasoline production was 4.2% more than the 9,566,000 barrels of gasoline that were being produced daily over the same week of last year, but 0.8% below our gasoline production of 10,049,000 barrels per day during the week ending May 31st, 2019, ie, during the year before the pandemic impacted gasoline output….on the other hand, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 163,000 barrels per day to 4,984,000 barrels per day, after our distillates output had increased by 267,000 barrels per day over the prior week . . . but after other recent production increases, our distillates output was still 3.7% more than the 4,807,000 barrels of distillates that were being produced daily during the week ending May 28th of 2021, but 7.8% less that the 5,404,000 barrels of distillates that were being produced daily during the week ending May 31th, 2019…
Even with the big increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the sixteenth time in seventeen weeks, decreasing by 711,000 barrels to 218,996,000 barrels during the week ending May 27th,after our gasoline inventories had decreased by 482,000 barrels over the prior week….our gasoline supplies decreased again this week because the amount of gasoline supplied to US users increased by 179,000 barrels per day to 8,977,000 barrels per day, and because our exports of gasoline rose by 289,000 barrels per day to a 3 1/2 year high of 1,063,000 barrels per day, while our imports of gasoline rose by 43,000 barrels per day to 890,000 barrels per day . . . but even with 15 inventory drawdowns over the past 16 weeks, our gasoline supplies were still only 6.4% lower than last May 28th’s gasoline inventories of 233,980,000 barrels, and 9% below the five year average of our gasoline supplies for this time of the year…
With the modest drop in our distillates production, our supplies of distillate fuels decreased for the 15th time in twenty weeks and for the 27th time in thirty-nine weeks, falling by 529,000 barrels to 106,392,000 barrels during the week ending May 27th, after our distillates supplies had increased by1,657,000 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 102,000 barrels per day to 3,969,000 barrels per day, and because our exports of distillates rose by 229,000 barrels per day to 1,353,000 barrels per day, while our imports of distillates rose by 183,000 barrels per day to 263,000 barrels per day….after forty-two inventory withdrawals over the past fifty-nine weeks, our distillate supplies at the end of the week were 19.9% below the 132,802,000 barrels of distillates that we had in storage on May 28th of 2021, and about 24% below the five year average of distillates inventories for this time of the year…
With our exports of crude, gasoline and distillates all remaining high after recently hitting interim highs, i decided to check our total exports of oil and oil products compared to prior week…and while we weren’t at a record this week, it turned out that the 4 week average of our total exports of crude oil and petroleum products was at an all time high of 9,826,000 barrels per day, eclipsing the record of 9.750,000 barrels per day set 5 weeks ago…and since it’s a record high, we’ll include a graph of that so you can see what it looks like…
Meanwhile, despite this week’s big release of crude from our Strategic Petroleum Reserve, our commercial supplies of crude oil in storage fell for the 17th time in 27 weeks and for the 33rd time in the past year, decreasing by 5,068,000 barrels over the week, from 419,801,000 barrels on May 20th to 414,733,000 barrels on May 27th, after our commercial crude supplies had decreased by 1,019,000 barrels over the prior week…with this week’s decrease, our commercial crude oil inventories fell to about 15% below the most recent five-year average of crude oil supplies for this time of year, but were still 16.8% above the average of our crude oil stocks as of the last weekend of May 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 May 27th were 13.5% less than the 479,270,000 barrels of oil we had in commercial storage on May 28th of 2021, and were also 22.1% less than the 532,345,000 barrels of oil that we had in storage on May 29th of 2020, and 14.1% less than the 483,264,000 barrels of oil we had in commercial storage on May 31st 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 4,803,000 barrels this week, from 1,686,064,000 barrels on May 20th to 1,681,261,000 barrels on May 27th, after our total inventories had fallen by 5,315,000 barrels during the prior week….that left our total liquids inventories down by 107,172,000 barrels over the first 19 weeks of this year, and at the lowest since October 24th, 2008, or at a 13 1/2 year low, as you can see on the graph below…
