Link here. Yes, it was a very slow news week. This is always one of my favorite sections of the weekly update (minor editing):
Meanwhile, US oil refineries reported they were processing 14,712,000 barrels of crude per day during the week ending August 21, 2020.
That is 225,000 more barrels per day than the amount of oil they used during the prior week.
Over the same period, the EIA's surveys indicated that a net of 922,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US. Based on that "reported & estimated data," this week's crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports, from storage, and from oilfield production was 438,000 barrels per day less than what our oil refineries reported they used during the week.
To account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a (+438,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the average daily supply of oil and the data for the average daily consumption of it balance out.
Essentially, this is a fudge factor that the EIA labels in their footnotes as "unaccounted for crude oil,"thus suggesting an error or errors of that magnitude in the oil supply & demand figures we have just transcribed.
With last week's fudge factor at -421,000, that means our week-over-week comparisons on oil supply & demand changes are off by almost twice as much, even as we continue to report them as an indicator of what most oil traders and analysts believe happened, since that's what affects their behavior.
Much, much more at the link. Most interesting is the section on distillate production and inventory. Just a snippet:
Our supplies of distillate fuels increased for the seventeenth time in 32 weeks and for the 22nd time in 47 weeks.
After this week's inventory increase, our distillate supplies were 31.7% above the what we had in storage on August 23, 2019, and about 24% above the five year average of distillates stocks for this time of the year.Staggering. And it doesn't make sense. Why are refiners continuing to produce so much distillate fuel?
IMHO, its likely the least costly method to refine the type of crude oil that is available. Demand will pickup during the winter months.
ReplyDeleteThat makes sense. Very inexpensive to produce. Yes, demand will pick up during the winter, but when this whole discussion began, I was curious why inventories have soared and, in addition, the normal seasonal pattern has reversed. Normally we see distillate stocks rise as we move toward the winter months; we don't see record-setting inventory during the summer.
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