Weekly EIA Petroleum Report -- March 10, 2021

Link here. 

WTI: drops below $63.50.

OPEC basket surges: up 8%; up $5.00; trading at $67.05.

Weekly EIA petroleum report:

• refiners were operating at 69% of their operable capacity;
• US crude oil inventories increased by almost 14 million bbls from the previous week; that's on top of the 20+ million build last week; so now, in two two week, US inventories of crude oil have increased by 35 million bbls, are now 6% above the five-year average, and WTI is holding above $60;
• one can anticipate another 10-million-bbl build next week;
• US crude oil inventories are now, as noted 6% above their five-year average, with almost 500 million bbls in storage;
• gasoline inventories decreased significantly last week and are 6% below their five-year average;
• distillate fuel inventories dropped by 5.5 million bbls and are 15% below their five-year average; farmers are just getting ready to plant;
• propane/propylene inventories are likewise severely depressed, 15% below their five-year average
• jet fuel supplied was down 29.8% compared with the same four-week period last year;
  

I remember those articles written by millennials with Brit Lit / journalism degrees some years ago breathlessly reporting that Cushing storage was filling up and the world as we knew it was coming to an end. So, in the past two weeks, when crude oil inventories increase/decrease by one to five million bbls, crude oil in US storage increased by more than 35 million bbls -- perhaps much more. And I haven't read one story in which folks are concerned about running out of storage. And WTI is holding above $60. And OPEC basket is surging. The world needs that heavy oil now that Canada and Mexico can't supply it.

The weekly report can be interpreted many ways, I suppose, but it becomes an even more interesting report when taken in context.

If I get caught up, I will put the report in context. It might explain why WTI is holding above $60 despite the build. 

Over at oilprice.com, a contributor suggests why:

• gasoline is headed for $3.00 / gallon;
• why gasoline is quickly headed for $3.00 / gallon;

The contributor provides three reasons. 

Here are my top three reasons why gasoline is headed for $3.00 / gallon:

1. rising crude oil prices;
2. crude oil prices are rising; and,
3. rising crude oil prices will continue to rise.