Wednesday, September 21, 2022

EIA Weekly Petroleum Report -- September 21, 2022

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them. 

Updates

September 22, 2022: From the view of The [London] Mail

Original Post

"Fed" rate: up 0.75%.  Up 75 basis points.

  • to 3.00 - 3.25% range.
  • target: 4.4% for the year
  • "higher for longer"
  • no reductions until 2024 
  • doesn't see 2% inflation -- their target -- until 2025 -- three years from now. Wow.

Equity market:

  • the Fed rate increase at 75 basis points is so much better than 100 basis points, so market should have risen;
  • but, the "higher for longer" narrative turned the market down

Analysts:

  • many analysts think "the Fed" is going farther than it needs to go;
  • what these analysts are missing is that the Biden administration is going to keep spending more money, much more money
  • and, yes, the risk of recession has become worse, but it beats nine-percent inflation
  • based on historical averages, this aggressive rise in the rates means long-term investors have upwards of 600 days for more buying opportunities. Whoo-hoo!

Huge inverted rate curve:

  • two-year at 4.1%.
  • ten-year at 3.6%.

GDP forecast significantly lower: down to a mere 0.2%.

WTI: pretty much flat at $83.58.

EIA weekly petroleum report, link here:

  • US crude oil inventories increased by 1.1 million bbls
  • refineries operating at 93.6% of their operable capacity
  • gasoline inventories increased
  • distillate fuel inventories increased by 1.2 million bbls
  • distillate fuel still 18% below their five-year average
  • total commercial petroleum inventories increased by 9.2 million bbls last week
  • SPR releasing about one million bbls per day, or seven million bbls / week

Gasoline demand pending.

Imagine:

  • despite gasoline demand well off record highs (from 2019, before the year of the plague);
  • Saudi Arabia producing at record levels;
  • US releasing one millions bbls of oil per day from the SPR; and, yet,
  • US commercial supplies increased by only one million bbls for the week

US operators:

  • there's probably a reason US operators are more interested in returning cash to their shareholders than drilling more.

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