Steady Eddie -- Refinery Utilization -- December 20, 2015

Of all the oil and gas data tracked, this has to be the most boring, unchanging, "steady Eddie" graph I've ever seen, weekly US percent utilization of refinery operable capacity:



On the other hand, this data shows a significant trend in the amount of crude oil throughput in US refineries over the same period of time:



At the same time US gasoline demand:



Caveat: the time scales are different on all three graphs.

Three observations:

• since around 2000, US gasoline demand has flattened, after reaching a peak in 2006 and 2007
• crude oil refinery throughput has increased -- in the eye of the beholder, I think -- significantly
• meanwhile, refinery utilization has remained incredibly stable (and way under capacity)

I woke up about 2:00 a.m. realizing that I had failed to note one of the top stories this past week. The reason I missed it, of course, is because the week's "top stories" have to do with the Bakken. I try to keep all non-Bakken stories off the weekly top stories posts.

In this case, however, I think it's important to note the story. I think the most un-reported or under-reported story this past week was something picked up by John Kemp: the surge in US oil imports. With the glut of oil in the US it's absolutely counterintuitive that imports are surging. There is a lag in reporting so we won't know whether it's heavy oil or light oil or both that is contributing to the surge.

The most recent import data is from September, 2015, and this is already late December, speaking of which -- US automobile manufacturers post their monthly sales the first business day after the preceding month. In most cases, car sales for any give month are posted within 18 hours after the end of the month. On the other hand, the US government energy-related data is delayed for two to three months -- giving "insiders" a lot of information to work with. Even estimates coming out early would be helpful -- but I digress.

The most recent import data is from September, 2015:



So, you say: Kemp says US crude oil imports are surging and yet the graph shows quite the opposite? The graph above only goes through September, 2015, and John Kemp was referring to the past couple of weeks.

From Reuters, written by John Kemp:

U.S. crude oil imports have accelerated over the last four weeks, pushing commercial crude inventories within a whisker of the record set in April.

Crude imports surged to 8.3 million barrels per day (bpd) last week, up from 7.0 million bpd four weeks earlier, according to the U.S. Energy Information Administration (tmsnrt.rs/1NV47Y4).

Imports are running at the fastest rate since September 2013, with almost all the extra crude arriving at ports along the U.S. Gulf Coast. (tmsnrt.rs/1NV4dyW)

Both the timing and the location are unusual because refineries and traders try to minimize stocks held along the Gulf Coast at year-end to avoid storage taxes imposed by Texas and Louisiana. 

Faster imports have pushed crude stocks higher even as refiners have boosted the amount of crude they process to a seasonal record 16.6 million bpd.

Be sure to click on the embedded links in the John Kemp article. 

I have a lot of thoughts with regard to the three EIA graphs above, and John Kemp's data, but those thoughts are way beyond my comfort zone to post publicly.

I posted the data because I think it is the most under-reported energy-related story.

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Storage Capacity

Do you remember all those stories about crude oil storage capacity being maxed out in the United States? I am not going back to find them because a) they were likely inaccurate to begin with; and, b) they are now irrelevant regardless.

Reminder, US PADD districts and my personal thoughts:

• PADD 2: the Gulf Coast (including Texas)
• PADD 3: Cushing (includes Illinois and  the entire mid-continent including North Dakota) 
• PADD 1: East Coast -- irrelevant
• PADD 5: California -- really irrelevant
• PADD 4: Rocky Mountain region -- almost as irrelevant as California

With regard to US crude oil storage capacity, I recommend those interested read this EIA report closely.

These are some of the highlights of that report (with my comments embedded):

• the US has a huge -- a huge -- excess of storage capacity for crude oil
• to repeat, the US has a huge -- a huge -- excess of storage capacity for crude oil
• combined, the US Gulf Coast (55%) and Cushing (13%) account for 2/3rds of US crude oil storage capacity
• inventories at the Gulf Coast and Cushing are at record highs: 309 million bbls
• on a combined basis, only 70% of storage capacity is being utilized
• record storage utilization was barely much higher at 71%, April, 2015
• several years ago, the Gulf Coast and Cushing were often assessed separately (they still are), but combined utilization is now much more relevant given the increased pipeline capacity that can move crude oil south from Cushing to the Gulf Coast during a time of high global crude oil inventory builds
• despite the record utilization, there is still more than 100 million bbls of capacity available in these two areas 

I assume historical data is available somewhere, and if so, I will eventually stumble across it, but for now, this screen shot of most recent storage data as a baseline for future reference (the link appears to be dynamic):

And now, I'm going back to bed, now that I feel better about posting the most under-reported energy-related story of the week.

With the US export ban on crude oil repealed, it will be interesting to look at this same data a year from now.

By the way, a reason for an increase in imports and an increase in storage of crude oil has been posted on the blog. Regular readers may remember it. It was very, very obscure. I doubt I can find it again. If I remember, I will come back to it later this week. But as I tell my granddaughters, if something doesn't make sense, google it or follow the money. In this case, you won't find the answer at wiki.

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I see the Dallas Cowboys got beat "last night."

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Got 'Em

Israel takes out Hezbollah leader. 

Maybe it's just me, but it seems, for the best bang for the buck, the Israelis are most efficient. Everywhere I read, the US and Russia are dropping tons of bombs on Syria and not a lot seems to change. Meanwhile, the Israelis have these isolated, surgical strikes, and report a successful mission.

Can you imagine all the intel that went into this mission to take out this one man?

Dirty Harry