Oh, Oh -- The Bakken Strikes Back -- US Crude Oil Inventories Surge -- Up 6.8 Million BBls -- Saudi's Worse Nightmare -- Time To Re-Balance Jumps -- WTI Holds Above $64

Updates

Later, 9:50 a.m. CT: look at the data below -- it's really quite amazing --

• first, look at refinery operating data -- dropped to 88% -- I haven't seen that in a long time; likely due to refineries starting to switch from winter to summer blends; possibly due to regularly scheduled maintenance; possibly increased capacity coming on line
• second, note that despite the decrease in refinery operating data, gasoline production increased -- two important story lines:
• refineries able to maintain production despite operating at 88% capacity
• gasoline prices had been trending up over the past few weeks, and pundits were starting to talk about the impact higher gasoline prices might have on Trump's economy
• third, even though crude oil imports seem to be moving up/down in a narrow range, the fact is imports have had a four-week trend of decreasing
• fourth, the surge in US crude oil inventories is not something Saudi wants to see
• we will see the gasoline demand graph later today

Original Post

Anticipating EIA data later today: posted here.

• US crude oil inventories: increased by 6.8 million bbls
• refineries operating potential collapses; well below 90% now; at 88.1%
• despite that, gasoline production increased last week -- wow -- almost 10 million bbls per day
• distillate fuel production decreased last week
• crude oil imports down a bit, continuing that trend
• at 418.4 million bbls of crude oil, US crude oil inventories are in the middle of the average range for this time of year
• gasoline inventories near the top of the average range (all things being equal, gasoline prices should drop this week)

Re-balancing: the chart was getting too long, so I only included the data since October, 2017. This is really quite amazing. This is the first time in quite some time that the time to re-balance has increased, and the jump/reversal was not trivial. It jumped from 20 weeks to 24 weeks before we see re-balancing based on current rate of decrease in US crude oil inventories:

Week 24	October 12, 2017	2.8	462.2	40
Week 25	October 18, 2017	5.7	456.5	37
Week 26	October 25, 2017	-0.9	457.3	39
Week 27	November 1, 2017	2.4	454.9	38
Week 28	November 8, 2017	-2.2	457.1	42
Week 29	November 15, 2017	1.9	459.0	43
Week 30	November 22, 2017	1.9	457.1	42
Week 31	November 29, 2017	3.4	453.7	41
Week 32	December 6, 2017	5.6	448.1	37
Week 33	December 13, 2017	5.1	443.0	36
Week 34	December 20, 2017	6.5	436.5	30
Week 35	December 28, 2017	4.6	431.9	28
Week 36	January 4, 2018	7.4	424.5	25
Week 37	January 10, 2018	4.9	419.5	23
Week 38	January 18, 2018	6.9	412.7	20
Week 39	January 24, 2018	1.1	411.6	20
Week 40	January 31, 2018	-6.8	418.4	24