The headline news today is that WTI dropped back a bit. That's true, but North Dakota light sweet -- Bakken crude oil -- is closer to quality of Louisiana Light.
Note that Louisiana Light went over $80 / bbl today.
SPR release: suggested by Jim Cramer. LOL. This is as crazy as US Treasury considering a "trillion-dollar-coin." Two things:
- US producers will be justified not increasing production knowing that Resident Biden could release SPR crude oil at any time;
- the most that would be released would be 30 million bbls; would make no difference in big scheme of things.
The problem is not lack of crude oil; refiners are only operating at 89% operable capacity. Why IS oil so high when there is so much oil? I think it's called backwardation.
Someone saying it's "backwardation" makes them sound smart, but it doesn't explain a thing.
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Weekly EIA Petroleum Report
Significant data points:
- US crude oil in storage increased by a small-to-moderate 2.3 million bbls from the previous week; this is getting more headlines than it deserves;
- US crude oil in storage now at 420.9 million bbls, about 7% below the five-year average;
- refiners are operating at 89.6% of their operable capacity;
- US crude oil imports averaged 7.0 million bopd day, up by 483,000 bopd from the previous week;
- over the past four weeks, crude oil imports have averaged about 6.5 million bbls per day, 22.7% more than the same period last year;
- distillate fuel inventories decreased by 0.4 million bbls last week and are 11% below the five-year average
- propane/propylene inventories decreased by 0.6 million bbls last week; about 20% below the five-year average
- jet fuel product supplied was up 64.1% compared with the same four-week period last year;
I don't know what this means, but look at the huge jump in US crude oil imports these past few weeks as reported today, double what it was some weeks ago. Someone mentioned this was due to a huge increase in imported Canadian oil:
