Today's EIA Weekly Petroleum Report, Comments, And Comments From A Reader -- February 13, 2019

I've been blogging since 2007. I've probably been following the API weekly petroleum report for five or six years. I don't recall a more interesting petroleum report in all those years that the one released today. I posted the summary of that report and my comments earlier. Later, I received a comment from a reader that knows this "stuff" much better than I do. His comments were quite fascinating and I posted them at the original post as an update.

I seldom do this, but the petroleum report was so interesting, and the reader had such interesting comments, I felt compelled to post all of this again so that it is not lost in the clutter.

In addition, see more at focus on fracking. 

So here is the re-post:

Updates

Later, 6:13 p.m. Central Time: from a reader, see comments.

A few quick notes...85.9% of capacity is the lowest capacity utilization rate in 16 months....the 15,768,000 barrels per day of oil that were refined this week was also the lowest in 16 months, 2.4% below the 16,162,000 barrels of crude per day that were being processed during the week ending February 9th, 2018, when US refineries were operating at 89.8% of capacity...

So I'd have to say Venezuela played a part in that, but there is a seasonal slowdown that typically begins at this time of year as well...

Imports were at a 22-year low (1st week of Jan 1997)...that's pretty amazing, considering hurricanes...however, that goes in the books with a double asterisk; first,Venezuela; second, the Keystone pipeline being shut down...btw, the Keystone was supposed to be supplying some of that heavy crude the refineries were looking for...

Lastly, production topped 12 million bpd this week but "they've been reading my blog" and saw I predicted 12.1 million bpd, and since they couldn't let me front run them, they left production unchanged..

Witness: imports - exports + production is 541,000 barrels per day short of oil refined + the storage addition...  

Original Post

 
WTI jumps almost 3% after EIA releases stunning report. WTI up almost $2.00 and now trading solidly above $54.

See this story.

Global oil prices extended gains Wednesday, taking Brent crude to a fresh three month high, after data indicating a steep rise in U.S. stockpiles followed steeper-than-expected production cuts from key OPEC+ members Saudi Arabia and Russia. The Energy Information Administration said domestic crude inventories rose by a much-larger-than-expected 3.68 million barrels last week, taking the total to 450.84 million, the highest since November 2017. The figures offset forecasts for weaker demand and record U.S. supply from the International Energy Agency earlier in the session and sent prices higher in market around the world.

EIA link here. Weekly petroleum report --

• huge build and apparently completely unexpected
• crude oil inventories increased by 3.6 million bbls
• US crude oil inventories: 450.8 million bbls
• US crude oil inventories: 6% above the five-year average and the five-year average, on a rolling basis, keeps going higher
• refineries? operating at an incredibly low 85.9% capacity; I don't recall ever seeing refinery operating capacity this low, but I don't follow it closely
• US crude oil imports dropped by almost a million bopd
• are refiners having trouble finding the heavy oil they need to refine all that US light oil? this story has been repeated for several weeks;
• over the past four weeks, crude oil imports averaged more than 11% less than the same four-week period last year
• very, very interesting report
• will be interesting to see what analysts have to say about this one
• it's no longer business as usual 

Re-balancing? LOL:

Week	Date	Change w-o-w	In Storage	Weeks to RB to 350 Million Bbls
Week 0	November 21, 2018	4.9	446.9	N/A
Week 1	November 28, 2018	3.6	450.5	N/A
Week 2	December 6, 2018	-7.3	443.2	N/A
Week 3	December 12, 2018	-1.2	442.0	Never at this rate
Week 4	December 19, 2018	-0.5	441.5	Never at this rate
Week 5	December 28, 2018	0.0	441.4	Never at this rate
Week 6	January 4, 2019	0.0	441.4	Never at this rate
Week 7	January 9, 2019	-1.7	439.7	A long, long time
Week 8	January 16, 2019	-2.7	437.1	Won’t happen in my life time
Week 9	January 24, 2019	8.0	445.0	Won’t happen i my life time
Week 10	January 31, 2019	0.9	445.9	Won’t happen in my life time
Week 11	February 6, 2019	1.3	447.2	Won’t happen in my life time
Week 12	February 13, 2019	3.6	450.8	Won’t happen in my lifetime

Analysts: price of oil is being driven by OPEC's commitment to cutting production. If so, OPEC cuts are going to have to offset:

• US shale production: light oil
• Canadian western sands production: heavy oil

I don't see it happening.