US Crude Oil -- Days Supply -- September 12, 2021

US gasoline consumption sets record: record-high US oil demand. Link to Tsvetana Paraskova.

• Gasoline inventories fell by 7.2 million barrels for the period, compared with a draw of 1.3 million bpd for the previous week. 
• In middle distillates, the EIA estimated an inventory draw of 3.1 million barrels for the week to September 3, a larger decline compared to the 1.7 million barrels draw for the previous week.
• Finished motor gasoline supplied in the week to September 3 rose to 9.608 million barrels per day, up from 9.578 million bpd for the previous week. 
• On a four-week average, implied gasoline demand in the U.S. stood at 9.523 million bpd, up by 8.9 percent compared to the 8.742-million-bpd four-week average demand for those weeks in 2020 (a lousy year to compare; better to compare with 2019).
  
• Four-week average jet fuel demand was up by 65.3 percent compared to last year, to 1.622 million bpd. Distillate demand was up by 11.2 percent to 4.126 million bpd.
  

Trending toward 2018? Link here. Much could be said about this graphic, but the big takeaway for me is the delta between 2020 and 2021. Think about this: Resident Biden killed the Keystone XL. The #2 US supplier for imported oil: Russia.

Shell in the GofM, link here:

• Shell's Mars, Ursa and Olympus assets remain shut in;
• damage assessments continue at Shell's West Delta-143 offshore facility
• Shell is working to understand the full extent of the damage

Link here for spreadsheet below.

Week	Days Supply	Change w/w
Mar 21 week 1	40.5	8.00%
Mar 21 week 2	41.8	3.21%
Mar 21 week 3	40.2	-3.83%
Mar 21 week 4	36.4	-9.45%
Apr 21 week 1	34.5	-5.22%
Apr 21 week 2	33.1	-4.06%
Apr 21 week 3	33.0	-0.30%
Apr 21 week 4	32.9	-0.30%
Apr 21 week 5	32.3	-1.82%
May 21 week 1	32.3	0.00%
May 21 week 2	32.2	-0.31%
May 21 week 3	32.0	-0.62%
May 21 week 4	31.4	-1.88%
Jun 21 week 1	30.6	-2.55%
June 21 week 2	29.6	-3.27%
June 21 week 3	28.7	-3.04%
June 28 week 4	28.0	-2.44%
July 2 week 1	27.5	-1.79%
July 9  week 2	27.1	-1.45%
July 16 week 3	27.3	0.74%
July 23 week 4	27.2	-0.37%
July 30 week 5	27.5	1.10%
Aug 6 week 1	27.4	-0.36%
August 13 week 2	27.2	-0.73%
August 20 week 3	27.0	-0.74%
August 27 week 4	26.5	-1.85%
Sep 3 week 1	27.2	2.64%

EIA Explains The US Weekly Crude Oil "Adjustment" -- July 18, 2019

Updates

July 19, 2019: see first comment. The reader points out something incredibly important and something the EIA either purposely or inadvertently "forgot" to mention or point out.

In the EIA discussion, the EIA states: 

In recent weeks, the crude oil adjustment has been growing in absolute value, as high as 881,000 barrels for the week ending May 24. 

In my book, 881,000 bbls can be rounded to one million bbls. 

According to the reader the EIA omitted two incredibly important words, "per day." I've noted the change as it should have been written in bold red in the original post.

If that's accurate, it means we are talking about as much as 6.167 million bbls "adjustment" per week -- hardly trivial.

Original Post 

We've talked about this a couple of times. Sometime in the very recent past, the last month (?), the EIA has apparently changed its methodology for calculating US crude oil inventories.

And here it is, how timely, released yesterday by the EIA, released July 17, 2019, This Week In Petroleum, the crude oil "adjustment" accounts for differences in supply and disposition.

But it looks like this does not explain any change in methodology; it simply explains why "supply and disposition" seldom balance.

The EIA must have been getting a lot of phone calls from Wall Street analysts losing their shirts.

Link here.

The explanation begins:

The U.S. Energy Information Administration’s (EIA) Weekly Petroleum Status Report (WPSR) provides weekly estimates of U.S. crude oil supply, including a measure of how well the supply of crude oil and the disposition of crude oil balance with each other.

This measure—referred to as the adjustment—is a derived term equal to the difference between supply and disposition. If the reported supply and disposition of crude oil balanced perfectly each week, the adjustment would equal zero. For several reasons, however, this is rarely the case.

Weekly U.S. crude oil supply and disposition data are based on a combination of EIA survey data, U.S. Customs and Border Protection data, and modeled estimates. All statistical samples using survey data have small but unavoidable imprecisions, and model estimated data’s precision can vary. This imprecision in estimating each element of the crude oil balance can result in some over- and under-estimation in both supply and disposition.

In recent weeks, the crude oil adjustment has been growing in absolute value, as high as 881,000 barrels [sic; see comment below] for the week ending May 24.

However, this is still relatively small, when compared with the entire U.S. crude oil balance, less than 2.5% on a rolling four-week average basis (the sum of production, imports, exports, and refinery inputs) (Figure 1 at the linked article).

Although an increased adjustment is, in some part, the result of the inherent challenge of estimating perfectly each reporting period, increasing volumes of U.S. crude oil production and exports and other factors may also play a role. EIA will continue to evaluate crude oil data to identify possible sources of the higher crude oil adjustment.

Wednesday US Crude Oil Data In Three Charts -- August 2, 2017

US Crude Oil Production Climbs To Highest Level In More Than A Year -- April 12, 2017

Apparently for US producers, $55-oil is just fine. From Bloomberg:

Crude retreated for the first time in seven sessions after a government report showed U.S. production climbed to the highest level in more than a year, offsetting data on declining stockpiles.

If you look really, really, really closely, you can just barely see the "retreat" in US crude oil reserves (white line) (LOL). On the other hand, even without reading glasses one can spot the increase in production (blue line):

This is the first time I've paid attention to the crude oil reserves graph. Look at that surge in 1Q15. That was the first quarter after the Saudis declared the end to quotas, I believe.