Speaking Of Record Production, Record Exports, Today's API Data; Anticipating Tomorrow's EIA Data -- December 6, 2022

We'll see the EIA data tomorrow but the API data today:

• amazing; but,
• same ol', same ol'.

Look at the crude oil inventories, over the past year:

• commercial US crude inventories have grown by just six million bbls this year, but ...
• SPR inventories fell by 206 million bbls -- that "decline" is 32 times the six-million-bbl build; 
• at least we now know where it all went. To Europe. 

Look at the numbers, the change this past week from the previous week:

• there was a draw of over six million bbls; 
• the previous week commercial inventories had dropped even more than that, almost eight million bbls; again, this is the commercial inventories;
  
• analysts had forecast a commercial draw of 3.9 million bbls;

The SPR: contains the least amount of crude oil since early 1984 -- let's see, 2021 - 1984 = thirty-seven years.

US crude oil production: 12 million bpd for the fourth week in a row:

• which is 400,000 bpd more than the level seen at the start of the year;
• but still one million bpd less than what the US was producing just prior to the pandemic.

Refined products (gasoline, distillates) in storage increased. 

We'll see the updated data tomorrow, but in last week's EIA report, US refiners were operating at nearly 95% of operable capacity, the highest I've seen since I started blogging over ten years ago.

On another note, two things to watch after the first of the year:

• I would imagine that 99% of US corporations will finally end all remote work / all work from home; and,
• what the Chinese do with regard to Covid restrictions.

EIA data:

By the way, here's a "thought experiment." Looking at the graph above, tell me again the Keystone XL pipeline was critical, the pipeline that would have brought another million bopd to the US from Canada starting around 2018, perhaps earlier.

That's a "trick question," of course. If all oil was created equal, the Keystone XL was absolutely unnecessary. But that would have been 20-20 hindsight; when the Keystone XL was being planned, no one knew about the coming US shale revolution.

And, of course, all oil is not created equal, but the "average American" doesn't (and didn't) know that. Maybe US refiners needed heavy oil from Canada, but US consumers didn't need Canadian heavy oil. 

Carrying this discussion a bit longer, imagine if the Keystone XL pipeline had been built -- any thoughts on how that might have affected the "build-out" of the Permian? Just asking. 

We're getting back to the same discussions we've had for the past ten years. 

What blows me away is the trajectory of that "US export line” after 2012.

By the way, record exports and nearly record production despite:

• US rig counts down significantly from five years ago;
• the US Dept of Interior slow-rolling the oil companies on permits on federal land;
• the bans on off-shore drilling;
• the decline in Alaskan oil production;
• the lack of interest in the Arctic;
• almost a similar lack of interest in shale oil plays across the US except for the P, the EF, and the B

Meanwhile,

• the Europeans have a supply problem: they produce nada, zilch, zero oil;
• the Chinese and Indians have a demand problem: they are both pro-oil but their demand is excessive, more than they can really afford if one thinks about it.