Big Supply Drop In Oil -- WSJ -- June 4, 2014

The WSJ is reporting: oil holds gains after US data shows big drop in supplies.

U.S. crude futures held gains Wednesday after official U.S. data showed a larger-than-expected drop in domestic oil inventories.

The U.S. Energy Information Administration said overall domestic crude inventories fell by 3.4 million barrels in the week ended May 30. Analysts surveyed by The Wall Street Journal predicted a decline of 100,000 barrels, and a survey by industry group American Petroleum Institute predicted a decline of 1.4 million barrels.

I'll get back to this story later. It will be interesting if they get the analysis right.

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This Week In Crude Oil / Gasoline / Diesel

I keep reminding folks this is not an investment site. But it is amazing what sites like RBN Energy and others have really helped me become a better investor. The above story was a real disappointment. That's about all it said. No analysis.

So, let's see if we can pull together some data points. Again, this is on the fly; I have no idea where this will take me.

First to EIA's "gasoline demand" link. This is an interesting data point. Go to the "conventional gasoline stocks" -- that would be the gasoline that Algore puts into his SUVs (by the way, when you look at these numbers, remember, US auto sales surged in May to some of the highest levels we've seen in years -- and yes, a lot of US autos still use gasoline, contrary to what Tesla supporters would have you think) -- so, back to the "conventional gasoline stocks" table.

For the US, one year ago, conventional gasoline stocks 46.5 million bbls. Let's round that to 50 million bbls. Easier to remember. The most recent report: 28.7 million bbls, or rounded to 30 million bbls, but if one rounds to 25 million, the table suggests that gasoline stocks are running 50% lower than a year ago. That can't be correct. I must be misreading the table. Look at the regional breakdown.

Look at Cushing, PADD 2: remember: the huge Keystone XL South is draining that site and without the Keystone XL North (killed by President Obama), it's not recharging as fast. I guess. At least that's my thought. Others will have different thoughts, I'm sure. By the way, TransCanada changed the name of the Keystone XL South pipeline to another name; I've forgotten what the new name is. Machts nichts.

Okay, on to the next data point. At the very bottom of the same page, look at the last table, and the last graph. Gasoline demand is rising ... well, pretty darn fast.

On to the next data point.

This is the EIA's weekly petroleum status report. I haven't read it yet; I'm reading it with you. I have no idea where it will go. Here goes:

Refineries are operating at 91% of their capacity (low).

• gasoline production decreased last week
• US crude oil imports continue to decrease, down by 700,000 bopd from previous week
• US crude oil inventories decreased by 3.4 million bbls from the previous week, but still near the upper limit of the average range for this time of year
• total motor gasoline inventories increased slightly and are in the middle of the average range
• distillate fuel inventories (diesel) increased by 2 million bbls but remain below the lower limit of the average range for this time of year

So, a mixed report. The 'low' refinery utilization jumps out at me as we head into the summer driving season.

For what it's worth, and it's not worth a lot, this is a link to gasoline prices around the US.