WTI drawdown: forecast: a 4-million bbl drawdown; actual: a 3.3 million build. Wow. From
CNBC. Weekly reports are here (dynamic link). I can hardly wait to see the John Kemp graphs over at Twitter.
- crude oil inventories: up 3.3 million bbls; now stand at 513.2 million bbls; at this rate (since it's an increase in build, and not a drawdown) the amount of US crude oil inventories will never decrease -- LOL -- see graph below
- gasoline inventories: increased by 3.3 million bbls
- refinery inputs: 17.2 million bopd; down 283,000 bopd
- crude oil imports: 8.3 million bopd; up by 356,000 bopd
- crude oil imports: over the past four weeks, up almost 10% above the same four-week period last year
WTI drops below $46. Now at $46.44. Next support, $45. If breaks through $45, watch for $42 WTI.
It looks like WTI is dragging down the overall market. WTI now at $46.16 (9:43 a.m. Central Time).
Then look at this:
Maybe I'm mis-reading something, but on a day that WTI drops to $46/bbl, the above graph does not look particularly reassuring for oil bulls.
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Weeks to Re-Balance
Prior to the Saudi Surge, the US had 350 million bbls of crude oil in inventory (not including SPR) and 21 days of supply. Folks are talking about re-balancing to the historical 5-year average, which, of course, makes no sense, since the 5-year average was greatly "inflated" by the two-year Saudi surge (2014 - 2016). Granted, US demand is increasing; US is exporting crude oil; and US refineries are exporting refined products, so perhaps one can argue the "350-million" basis is a bit low, but at most, I would assume, 360. So, I'm leaving it at "350" for now.
Just for the fun of it, I was tracking, based on the weekly drawdown how long it would take to "re-balance" -- back to 350 million bbls in US crude oil inventory (see graph below). The numbers don't quite work in some cases, but the raw data is from the EIA. Drawdown (
column 3 in millions of bbls is shown as a positive number; any increase in inventory is shown as a negative -- that may be confusing and I may change that in the future).
For example, last week, based on a drawdown of 6.4 million bbls / week, it would have taken about 25 weeks to re-balance. Using an average up to that time of 3.9 million bbls/week over the five-week period, and an inventory of 509.9 million bbls, it would have taken 41 weeks to "re-balance" to 350 million bbls. Whew.
To "re-balance":
- with today's increase, the average over six weeks of drawdown: 2.7 million bbls/week on average over the past six weeks
- with today's inventory number of 513.2 million bbls, it would take 60 weeks to "re-balance" to 350 million bbls. (Update: methodology was wrong in some parts of this table; it has been updated and corrected at this post):
Week
|
Date
|
Drawdown
|
Storage
|
Weeks to RB
|
Week 0
|
Apr 26, 2017
|
|
529
|
180
|
Week 1
|
May 3, 2017
|
0.9
|
528
|
178
|
Week 2
|
May 10, 2017
|
6
|
522
|
50
|
Week 3
|
May 17, 2017
|
1.8
|
520.2
|
59
|
Week 4
|
May 24, 2017
|
4.4
|
515.8
|
51
|
Week 5
|
May 31, 2017
|
6.4
|
509.9
|
41
|
Week 6
|
June 7, 2017
|
-3.3
|
513.2
|
60
|
Disclaimer: I make a lot of simple arithmetic errors.
