Weekly EIA Petroleum Report -- June 2, 2022

Updates

June 3, 2022: see comments --

The four-week average of our total exports of crude oil and petroleum products was at an all time high of 9,826,000 barrels per day last week, eclipsing the record of 9,750,000 barrels per day set 5 weeks ago..

We’ve been hitting interim highs on each in recent weeks; ie, last week our crude exports were at a 26 month high, this week our gasoline exports were at a 3 1/2 year high…this metric aggregates all those exports:

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=wttexus2&f=4.

On OPEC; in July 2021, they agreed to increase their production by 400,000 barrels per day in August, and again by that amount in each of the following months, and also to boost reference production levels for the UAE, the Saudis, Iraq and Kuwait beginning in April 2022; that brought April's quota up to 432,000 barrels per day. 

The current agreement is to pack three monthly increases into two months, hence 648,000 bpd for July and August.

Original Post

WTI:

• prior to report being released, WTI back up to $115 after falling to $112 overnight;
• moments after the report was released: WTI back to $114.60 
• about fifteen minutes after the report released: back to $115.50.
• forty-five minutes after the report was released: just shy of $117.00.
  
• looks like we're in a $110 to $120 trading range.
  

OPEC+:

• agrees to precisely a 648,000 bopd production hike in July, 2022.
• I know they spent hours deciding whether it should be 649,000, or even 650,000 but the latter, 650,000 would have seem contrived
• at a minimum, two million bbls of Russian oil will come off the market by the end of the year; the 648,000 bopd quota increase is 200,000 bopd -- vs that two million bbls of Russian oil 
• from Julianne Geiger yesterday, before the meeting;
• according to Amena Bakr, the proposal for a 648,000 bpd increase was discussed as being an overall increase for the OPEC+ group, to be divided among its members equally. In reality, however, there are numerous OPEC+ members that cannot meet their current quotas and are highly unlikely to meet a new, even higher quota.
• Such an increase would, however, afford Saudi Arabia, the UAE, and Iraq—all of which are thought to have excess spare oil production capacity—the ability to increase production.
• an increase of 200,000 bpd divided among these Big Three results in about a production increase of 70,000 bopd for each -- are you kidding me -- and everyone was holding their breath, waiting for the outcome of this meeting. What am I missing?
  

The report: the week ending May 27, 2022, so this would have been just before Memorial Day and the opening of driving season in the US.

Link here.

• US crude oil in storage decreased by a pretty significant 5.1 million bbls considering the SPR release.
  
• US crude oil in storage now stands at 414.7 million bbls, 15% below the five-year average, and about double that required by law.
  
• US crude oil imports averaged 6.2 million bbls per day last week; down by 268,000 bbls per day; over the past four weeks, crude oil imports have averaged about 6.4 million b/d, 7.3% more than the same four-week period last year
  
• US refiners are operating at 92.6% of their operable capacity, down very, very slightly from last last week (93%)
  
• US distillate inventories decreased by 0.5 million bbls; inventories stand 24% below their five-year average
  
• Jet fuel supplied was up 19% compared with same four-week period last year
  

Gasoline demand will be reported later.

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Other Energy News

Airlines: United Airlines CEO says there is no hint of slowdown in consumer demand. Link here. Google subject for more.

Permian: coming on the back of the Permian story yesterday, here is more -- if you believe the frack data vendors (satellite-based), there is a wall of production coming in late 2H22 out of the Permian. Link here. 

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ESG

Greenwashing: Deutsche Bank -- Trump's bank -- unit CEO resigns over "greenwashing" raid. Why does this not surprise me? Link here.

ESG outflows: ESG equity funds see record outflows in May. Link to Rigzone. I assume Jim Cramer is all over this one. LOl. 

This year’s weak performance by US stocks has forced many investors to recalibrate their portfolios. And they’re fleeing do-good strategies.

After more than three years of inflows, investors are now pulling cash out of US equity exchange-traded funds with higher environmental, social and governance standards. May saw $2 billion of outflows from ESG equity funds, according to data from Bloomberg Intelligence -- the biggest monthly cash pullback ever.

“There’s no way to know for certain why the outflows were so extreme,” said Bloomberg Intelligence analyst James Seyffart, who noted that the funds had started from a high-asset base after years of inflows. “But also ESG ETFs may be finding that people care a lot more about them in bull markets.”

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Cars

Cars: Stellantis cuts output at two North American plants due to semiconductor shortage. Still? Link to Argue Media. SUVs in Toluca, Mexico, and minivans in Windsor, Ontario, are affected; will be idled for one week. 

Cars: same link --

AutoForecast Solutions this week increased the number of automotive builds expected to be lost in this year by 15,000 vehicles to 135,000. 

Another 400,000 are at risk of not being built, with more than 200,000 listed as recoverable, according to the forecaster's weekly update. 

The reductions follow an early May reduction in AutoForecast Solution's North American production forecast to 14.82mn units, down by 330,000 units from its March outlook. 

Cars: I was so wrong on this. I honestly thought the semiconductor chip shortage would have been resolved by now. I was so sure that there would have been a wall of car production by the end of summer. I was really, really wrong. Sort of like Janet Yellen and "transitory" inflation.