Thursday, March 4, 2021

Idle Comments On That 20+ Million-Bbl Build Last Week -- March 4, 2021

That 20+ million bbl crude oil build could have been 30-million bbls. See this link. Some things to consider with regard to the Texas February Freeze:

  • prior to the EIA weekly report, there were forecasts that there would be a 2-million-bbl withdrawal, which is/was very much in line with previous reports, and typical of weekly EIA petroleum reports;
  • in the big scheme of things, nationwide, there was not much of a drop in economic activity across the US during the Texas February Freeze, February 15 - February 19, 2021
    • even in Texas, the overall economic activity probably did not drop all that much; 
    • in fact, hotels were booming; plumbers were busier than ever; propane dried up, it was in such demand; 
    • confirmed by no change in gasoline demand, a pretty good indicator of economic activiity;
  • reports were coming out of the Permian that "everything" was shut down; i.e., no crude oil production;
  • reports within days following the unfavorable event suggested that refineries, though hit hard, were opening up
  • there were reports that one out of seven service stations in north Texas were out of gasoline, I didn't see that; hurricanes cause much more regional trouble
  • gasoline demand remained pretty much unchanged week/week according to this week's EIA report
  • I'm hoping that RBN Energy blogs about that 20+ million bbl build -- in hindsight, it all makes sense, but it certainly seems to have caught analysts off guard

Cushing:

  • according to wiki: crude oil tanks around Cushing have approximately 91 million bbls of storage capacity;
  • from a reader citing ZeroHedge:
  • API had Cushing +732k barrels; EIA had Cushing +485k
  • in other words,
  • the EIA reported a 20+ million-bbl build in crude oil in the US last week
  • EIA and API both had Cushing builds well below one million bbls;
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