U.S. crude oil imports averaged 6.5 million barrels per day last week, increased by 1.1 million barrels per day from the previous week.
Why would this happen? US crude oil inventories increased by a whopping 15 million bbls of oil last week. The last thing the hubs needed was more oil. And yet, the price of oil hardly moves.
December 10, 2020: See first comment. Reader cites builds in crude oil inventories back in April, 2020. The reader is so correct. Look at the builds in crude oil in those five weeks during the month of "April." It was during this period that WTI crashed and on April 20, 2020, actually "went negative."
Week 67
March 4, 2020
0.8
444.1
Week 68
March 11, 2020
7.7
451.8
Week 69
March 18, 2020
2.0
453.7
Week 70
March 25, 2020
1.6
455.4
Week 71
April 1, 2020
13.8
469.2
Week 72
April 8, 2020
15.2
484.4
Week 73
April 22, 2020
15.0
518.6
Week 74
April 15, 2020
19.2
503.6
Week 75
April 29, 2020
9.0
527.6
Week 76
May 6, 2020
4.6
532.2
Week 77
May 13, 2020
-0.7
531.5
Week 78
May 20, 2020
-5.0
526.5
Original Post
Vince Lombardi
This confirms my suspicion that no one knows what is going on. [Assuming the EIA report is not in error and that I'm reading it correctly.] Link here.
Did anyone see this coming?
From the EIA today, holy mackerel:
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 15.2 million barrels from the previous week.
At
503.2 million barrels, U.S. crude oil inventories are about 11% above
the five year average for this time of year.
Total motor gasoline
inventories increased by 4.2 million barrels last week and are about 5%
above the five year average for this time of year.
Finished gasoline
inventories decreased while blending components inventories increased
last week.
Distillate fuel inventories increased by 5.2 million barrels
last week and are about 11% above the five year average for this time of
year.
It will be interesting to see "Focus on Fracking" this Sunday.
Re-balancing (many rows are hidden to keep the spreadsheet short enough to fit on the blog). When I re-started this spreadsheet back in 2018 there was much talk about "re-balancing." US crude oil inventories were at 447 million bbls. Today, a huge, huge inventory build, and US crude oil inventories are now over 500 million bbls.
Based on recent OPEC+ action, they didn't see this coming either.
But someone must have seen it coming: WTI/OPEC/Brent prices barely move.
OPEC and the International Energy
Agency delivered bad news for the oil market this week. Both authorities
revised their oil demand forecasts for this year, and both revised them
downwards. But it is not just demand that will continue to weigh on oil
prices. Supply is excessive and likely to remain so until the end of
next year.On Monday, OPEC said
in its Monthly Oil Market Report that it expected oil demand this year
to shrink by 9.5 million bpd. That’s an upward revision of 400,000 bpd,
from an expected contraction of 9.1 million bpd in August.
A day later, the IEA, in the latest release of its Oil Market Report, said it expected demand this year to contract by 8.4 million bpd. That’s a
larger demand growth contraction than they were anticipated in the
previous month, when the oil industry body expected a smaller
contraction of 8.1 million bpd.
Neither picture is rosy.
What’s even less rosy are the
projections for supply. According to both authorities, at the end of
next year, the global oil supply will be above levels from end-2019. The
exact amount by which end-2021 stocks will exceed end-2019 stocks vary,
but the very fact both OPEC and the IEA expect higher oil stockpiles
after more than a year of sizeable OPEC+ production cuts is telling. And
the story it is telling is not a happy one.
Wow, wow, wow. This takes me back to all those discussions we had on whether Saudi Arabia retained bragging rights as the swing producer, or whether US shale was the "new" swing producer. We're not talking about how much oil either Saudi Arabia or US shale oil could put into off-shore tankers; we're talking about actual change in production.
Headline writers still writing "the expected narrative."
Re-posting. I'm sure I'm misreading something.
Swing producers? US shale? I don't know. We'll have to look
at the numbers six months from now, but it certainly appears that US
shale operators can "turn on a dime." I think it's fascinating. News out
of the Mideast suggest weeks, if not months, of negotiations, talk,
fake news, etc., and then we might finally see some data. US shale -- in
the Bakken it's a daily update. In the Permian maybe a bit longer, but
certainly within a month we see production responding to geopolitical
events. Whatever. Idle rambling. Waiting for EIA data. [Update: five minutes later -- wow, talking about turning on a dime! See below.]
EIA, weekly data, link here, and here, pending, released at 9:30 a.m. CT -- are you kidding me? --
US crude oil inventories decreased by 0.7 million bbls from the previous week
US crude oil inventories now stand at 531.5 million bbls -- 11% above the already fat five-year average;
