Weekly EIA Petroleum Report -- October 26, 2022

Link here.

• US crude oil inventories increased by a modest 2.6 million bbls; US inventories are just fine, only two percent below thee five-year average, and "locally-produced" oil has gone up significantly over the past five years.
• there are seven days in the week
• the US is releasing about one million bbls / day from the SPR
• seven x one = seven million bbls from the SPR -- and yet, the commercial inventories increased by only 2.6 million bbls; in other words, five million bbls / week of SPR oil is going somewhere: to US refiners and/or exports to Europe;
  
• refiners are cutting back on refining; some of it may have to do with scheduled maintenance, after the summer driving season and heading into historically low-demand months of autumn / winter;
• anytime I see refiners dropping below 90% of their operating capacity gets my attention. Eighty-nine percent is noteworthy. 
• Less than 89% is more than noteworthy, for me. Last week? 88.9%. 
• My hunch: if you asked SecEnergy Granholm for that number she would not know it without looking it up. Some say refining is the problem / bottleneck as the explanation for the stubbornly high prices despite more-than-adequate supply; I used to say that, also. 
• I'm not so sure any more. Regardless, Valero told SecEneergy Granhalm that "shuttered" refineries are not going to re-open;
• do you want to see panic in Los Angeles? Watch what happens if some company announces another refinery is to close in California.
  
• gasoline inventories decreased a bit but are only six percent below the five-year average; not a big deal;
• the real metric to follow is not how much gasoline "we" have but how many days supply we have;
• the days of crude oil supply? Creeping up; trending toward 28 days which is way too much if, as an investor, one likes to see higher prices; ninety-nine percent of Americans should be happy to see this number growing (for them, trending toward 30 would be nice);
• the real problem is distillate, heating oil, diesel -- see this post;
  
• distillate fuel inventories changed very little; up by 0.2 million bbls -- probably not statistically significant and probably not "reproducible" if someone were to re-measure;
• whatever the number is, distillate fuel inventories remain a whopping 20% below the five-year average and I think I read somewhere, the US has about 25 days of diesel fuel available. The fact the hurricane season is coming to an end, suggests the diesel fuel inventories will be down (as much as 20% for the foreseeable future) but still way more than needed. I'm not convinced diesel fuel inventories are driving the high price of diesel.
• propane, interestingly enough is 3% above the five-year average -- and farmers use a lot of propane -- but mostly at harvest, which is now pretty much done for the season and for the year; again, for reasons that might not make sense to some, but make sense to me, propane is still priced at historic highs;
• airlines are doing fine: jet fuel supplied was up only 3.3%l; jet fuel price data is here but the data is several months old;

Most "analysts" -- 90% of whom are like me -- no training, no education but great at sitting in armchairs at home and commenting -- suggest that next summer there will be a severe shortage of oil and the price of gasoline will surge.

Speaking of which, the current average price of gasoline in Los Angeles, California, according to the AAA  is $5.713 for regular. 

Twenty-five-thousand miles per year x 25 miles per gallon x $6 / gallon = 1,000 gallons = $6,000 / year or $500 / month. 

Minimum wage, $15 / hour; $500 = 30 hours, or about one week every month just for gasoline?

Average utility bill in a Los Angeles apartment: $250 / month; more in the summer for a/c; much less in the winter months.

One would assume a single home would run twice that?