Another week of fun. Pirate attacks, record prices, the only thing that has not been too bad is the refinery outages, because no one is running the refineries.
The two questions of the week: What will happen to imports, and what will be the rate of refinery utilization. The crude oil imports have been radically variable all spring, last week was a low week, so it would not be totally unexpected to see a big slug of imports come into the country, and cause the inventory to build. I estimated above that the imports would be a little higher than the 4-week average, so we should see a little build, but you know, the way this has been going lately, it could be anywhere from a huge build to a huge decline, depending on the unloading schedule.
In refinery utilization, even though it is getting toward the time of year for people to gear up, the plant managers are looking at the current situation and saying "why bother". The refinery margins are a little improved, but not spectacularly, the crude oil price is at a record, and every day in the paper there is some article about demand backing off. Plus, inventories at about 215 million barrels are still pretty high, so the argument can be made that they will not run the refiners exhaustively until the situation changes.
So if this is the case, the crude oil sent to the refiners will be low, the unleaded and distillate production will be low, and you will see another drawdown in unleaded, and maybe break even in distillates.
Maybe next week or the week after we will start to see a little bit of increased production from these guys. At some point, someone is going to wake up and say "not enough gas" and then, watch the crude oil price shoot up as all of these people go into the market and try to find some oil.
Posted: Mon Apr 21, 2008 6:02 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (New Thread)
[quote="pup55"]
Quote:
Prediction
Maybe next week or the week after we will start to see a little bit of increased production from these guys. At some point, someone is going to wake up and say "not enough gas" and then, watch the crude oil price shoot up as all of these people go into the market and try to find some oil.
And this is why you start seeing big price swings as a resource production peaks. Outside of overall increasing prices one of the hallmarks of a declining resources is increasing price volatility as the market adjusts. In my opinion because of this we will reach a point sometime this summer maybe even early on that the US will have to surge gasoline imports.
Will they exist ?
Joined: Sep 16, 2004 Posts: 4454 Location: Southwest WI
Posted: Wed Apr 23, 2008 9:31 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (New Thread)
Quote:
Summary of Weekly Petroleum Data for the Week Ending April 18, 2008
U.S. crude oil refinery inputs averaged 14.8 million barrels per day during the
week ending April 18, up 591,000 barrels per day from the previous week's
average. Refineries operated at 85.6 percent of their operable capacity last
week. Gasoline production moved slightly higher compared to the previous week,
averaging nearly 8.9 million barrels per day. Distillate fuel production rose
last week, averaging 4.1 million barrels per day.
U.S. crude oil imports averaged 10.0 million barrels per day last week, up
nearly 1.2 million barrels per day from the previous week. Over the last four
weeks, crude oil imports have averaged more than 9.5 million barrels per day,
711 thousand barrels per day below the same four-week period last year. Total
motor gasoline imports (including both finished gasoline and gasoline blending
components) last week averaged 1.0 million barrels per day. Distillate fuel
imports averaged 261,000 barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased by 2.4 million barrels from the previous week. At
316.1 million barrels, U.S. crude oil inventories are in the lower half of the
average range for this time of year. Total motor gasoline inventories decreased
by 3.2 million barrels last week, and are at the upper limit of the average
range. Both finished gasoline inventories and gasoline blending components
inventories decreased last week. Distillate fuel inventories decreased by 1.4
million barrels, and are in the lower half of the average range for this time of
year. Propane/propylene inventories increased by 2.2 million barrels last week.
Total commercial petroleum inventories increased by 0.7 million barrels last
week, and are in the lower half of the average range for this
time of year.
Total products supplied over the last four-week period has averaged 20.7 million
barrels per day, up by 0.8 percent compared to the similar period last year.
Over the last four weeks, motor gasoline demand has averaged nearly 9.3 million
barrels per day, up by 0.9 percent from the same period last year. Distillate
fuel demand has averaged nearly 4.3 million barrels per day over the last four
weeks, up 0.5 percent from the same period last year. Jet fuel demand is 1.3
percent lower over the last four weeks compared to the same four-week period
last year.
Gasoline down again. _________________ "Oil is going up because we use too much oil, and the capacity to replace reserves is dwindling"
-President Bush 11/07/07
Joined: Sep 16, 2004 Posts: 4454 Location: Southwest WI
Posted: Wed Apr 23, 2008 9:35 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (New Thread)
GASOLINE DEMAND IS UP FROM LAST YEAR... _________________ "Oil is going up because we use too much oil, and the capacity to replace reserves is dwindling"
-President Bush 11/07/07
Posted: Wed Apr 23, 2008 9:41 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (New Thread)
Imports up to 10.0 and utilization up over 85. But gasoline demand is STILL up. Overall nothing too exciting here this week, but looks a bit bullish overall considering the imports and increase in utilization. One would expect a bigger build in crude than we got.
We were expecting imports to be a little higher this week to offset a little lower imports last week on crude oil, and that is what happened.
Also important was the fact that the refineries started up a little bit, increasing by 2%, and the additional refinery inputs were about .5 mbpd over and above previous. We had been expecting them to pick up over the next couple of weeks: I guess they decided to run the refinery and did not go and play golf like we thought.
It will be interesting to see what happens on crude oil imports next week. If the 10.0 mbpd imports was just the bubble from being low the last couple of weeks, and the real level is about 9.5 which is what the average says, we could start serious crude oil drawdowns starting in the next couple of weeks.
Forecasting wise, I underestimated distillate demand. Anywhere else I was off in production was offset by either demand or something else, so the end result was respectable.
As has been noted above, unleaded demand is still quite strong.
Crude oil has backed off a little from the highs, but I see that the distillates/unleaded gap has narrowed a little bit this morning.
Joined: Oct 23, 2004 Posts: 5907 Location: New Jersey
Posted: Wed Apr 23, 2008 11:47 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (New Thread)
Well we don’t quite have a pray to the god of gasoline deliveries yet (here in the US), but we may have to soon. As French oil ports and refineries are closed down by strikes today – to be possibly followed soon by a more wrenching shutdown of the Forties oil field and British gasoline refineries – the outlook, to put it mildly, is bleak. Did I mention Mexican gasoline imports also hit record levels in March, quite likely taking supplies that may have otherwise gone to the US?
While the dismal US oil import trend improved somewhat last week, over the last four weeks imports have averaged about 9.5 million barrels per day. It’s becoming clear that Mideast OPEC exporters did indeed cut back oil shipments to the US starting about late January and increasing in depth up through March. Therefore my previous WAG of 9.6 mbpd imports for April, which I originally thought was pessimistic, is actually too optimistic. I think we should expect at most 9.5 mbpd of imports going forward until at least about mid-May – when there may be improvement if previously discussed strikes are miraculously resolved within a day or two from now.
It was already previously discussed elsewhere here that it’s getting kind of late for US refiners to step up production in anticipation of the summer driving season. Part of the reason is that they have tried somewhat to step up distillate production to alleviate near shortage conditions in the USLD (diesel) market. Refiners even managed a second week in a row of a counter-cyclical increase in distillate production. Refiners also restarted some facilities about 10 days long that were off-line for some time, but in recent days more new maintenance issues have developed. So refinery ‘repairs’ seem to be occurring more frequently lately, and are taking longer to fix, as refiners don’t see processing $118 oil as very profitable.
Where do we go from here? Is it time to dust off those official government reports on minimum operating levels for oil and gasoline again? This week’s experience with petrol shortages in Scotland indicates there’s a fine level between smoothly functioning oil product deliveries and trouble - and once that line is crossed it’s difficult to get back where we were before.
With finished gasoline inventories already a million barrels less than last year, the time is coming soon (by June 1) to see if summer blend gasoline will really be available in sufficient quantity.
I hope so, but maybe it’s not too early to send in your prayer requests.
Below: Gasoline imports lag, while demand increases.
Joined: Oct 23, 2004 Posts: 5907 Location: New Jersey
Posted: Thu Apr 24, 2008 5:10 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (New Thread)
Oil products prices hit record levels in England today as a refinery strike looks like it will be going ahead. While there doesn't appear that any unusual amount of oil products have been exported from the US to England lately, exports from other countries that may have been intended for the US could have been diverted to England.
Quote:
U.K. Says Supplies Sufficient as Ineos Shuts Refinery
By Alexander Kwiatkowski and Bill Murray
April 24 (Bloomberg) -- The U.K. government said recent imports of fuel into Scotland will keep supplies ``sufficient'' as Ineos Group Holdings Plc proceeds with the closure of Scotland's only refinery before a planned labor strike.
``Over the last few days significant additional supplies of imported fuel were made available,'' Hutton said. Fuel ``should be sufficient to maintain supplies through the period of the industrial action and the consequent restarting of the plant.''
Posted: Fri Apr 25, 2008 9:17 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (New Thread)
Time for some graphs:
The top model is a model for US unleaded production. This model takes into consideration two assumptions: Production increases at about the same trajectory that it did last year, and also, production peaks out at 9.5 mbpd. Keep in mind that this model is actually pretty optimistic. Last year, there was only one week with unleaded production over 9.3 mbpd, due to the Texas City/Whiting downtime, and also, various refinery disasters, including flood and fire.
The second model is for unleaded demand. This model takes into consideration the "demand balance" that we have discussed previously, and assumes 0.5% growth between this year and last. This is less than the actual growth in this number that we have observed for the last month or so. You can argue whether this is a valid assumption or not, but as of now, it is consistent with the historical data.
The third model is the US inventory, using three different scenarios for imports: 1.0 mbpd, 1.1 mbpd and 1.2 mbpd. Keep in mind that last year, for April, we averaged about 1.2, and for May, we averaged 1.4 mbpd imports. Thus far in April we have imported less than 1.0 mbpd.
So what we can see from this is: given some plausible-to-optimistic assumptions about domestic production and demand, it will take at least 1.1 or more desirably, 1.2 mbpd of imported finished products in order to keep our inventories stable.
So given DP's/KevO's/Leanan's news reports within the last few weeks, here is the current situation:
Mexico is currently taking in .1 mbpd over and above what they were last year for finished product imports
Three Valero refineries around the gulf coast/Aruba are running at below capacity and are sitting around waiting to be sold, because they cannot take heavy crude without either catching on fire or exploding.
There are two strike situations going on in Europe: French ports, possibly affecting .1 to .2 mbpd of finished products exports, and the Scottish labor situation that is probably affecting another .1 or .2 mbpd of finished products exports, and maybe .35 of unleaded for UK domestic consumption. The ripple effect of this will probably not hit the US until about a month from now, along the east coast.
Refineries have started to scale up for summer, despite really not very impressive refinery margins.
China's fuel consumption has gone up 12% this year vs. last, which takes probably another .1 or .2 mbpd out of the supply situation for finished products.
Global demand is still expected to grow something on the order of 1.4 or 1.5% overall, according to the last OMR
So we do not know for sure what will happen from here on out, but we will continue to look at the finished product imports as well as the demand behavior vs. last year for some clues as to whether the system will have some stress this summer.
We have already had some reports of shortages in various parts of the country, namely the Southeast and Texas.
If the unleaded imports are less than about 1.15 or 1.2 mbpd, it's bad. If they are higher than that, it is good.
Joined: Sep 16, 2004 Posts: 4454 Location: Southwest WI
Posted: Fri Apr 25, 2008 9:38 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (New Thread)
Pup-
Don't forget about the stimulus checks. President B says they're in the mail I'm guessing a few billion of those checks alone get spent on gasoline...
Natural Gas storage was up 24Bcf. Not a huge gain. Natural gas has really taken off lately...its near $11 over on 321 right now. This past winter it seemed to hover around that $7 mark.
If this stays high, watch out next winter. If another cold winter shows up, people will have another expense to contend with. Maybe I should stuff my check in the piggy bank, i might need it to stay warm. _________________ "Oil is going up because we use too much oil, and the capacity to replace reserves is dwindling"
-President Bush 11/07/07
Posted: Fri Apr 25, 2008 9:52 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (New Thread)
Quote:
Don't forget about the stimulus checks
Hey, you're right! I think the stimulus checks will be spent on paying peoples' overdue credit card balance, so that stimulus will ultimately go to the banks, but there is a chance that they might be used to finance a trip across the USA in the Family Truckster, so the money will go to the Saudis.
This week we will be following the two numbers we talked about above: If the unleaded imports are less than 1.1 or 1.2, then inventories are going to be weak or falling. Also, if the refinery utilization does not increase at approximately the trajectory we did in the model above, this is also not good for happy motoring.
In unleaded, I am thinking a little more production online compared to last week, demand increasing at 0.5% over and above last year's level, and imports of 1.0 which is comparable to last week.
In distillates, I think the usage of 4.5 mbpd last week was a little higher than it should have been, this week will probably be a little more realistic and see about 4.4, but because of low imports, we will see a little drawdown.
In crude oil, we should look at imports: Last week, they were 10.0 but we have not had two straight weeks of imports over 10.0 since the last two weeks in February. Domestic production is what it is, and the refinery inputs should be a little higher than last week, so we should see a small inventory draw.
Edit/Note: After last week, we are now 12-4 vs. the analysts since January on unleaded. Overall we are still over 57%
Posted: Tue Apr 29, 2008 8:51 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (New Thread)
Quote:
An Energy Department report today will probably show that U.S. crude-oil supplies advanced 950,000 barrels in the week ended April 25 from 316.1 million barrels, according to the median of responses from 12 analysts surveyed by Bloomberg News.
Joined: Oct 23, 2004 Posts: 5907 Location: New Jersey
Posted: Tue Apr 29, 2008 9:15 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (New Thread)
Thanks pup55.
There are daily reports of diesel shortages around the world. At the same time, diesel exports out of the US are increasing from a very low level just a few years ago.
Being that the production of diesel is currently much more profitable than gasoline, US refiners have managed a counter-cyclical increase in distillate output - maybe at the expense of gasoline production. Granted US refiners are highly optimized for gasoline (as compared to the rest of the world), and can't increase diesel production very much more (if at all).
The circumstances surrounding diesel however are distracting us from a potentially much more serious problem this summer - gasoline shortages. Eastern US refiners need very high quality Nigerian oil to produce gasoline at their optimum output rate. MEND rebels in Nigeria have bluntly stated their intent to shut down most of the Nigeria's oil output in the delta area in their self-named "Operation Cyclone". So far, they've had significant success.
If gasoline imports don't pick up soon, and if Nigerian oil imports fall off as June arrives, we may be indeed encounter some type of gasoline market cyclone.
Posted: Wed Apr 30, 2008 6:21 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (New Thread)
Quote:
n the week to April 25, U.S. crude inventories rose by 1.1 million barrels, analysts polled by Thomson Financial News estimated, while refinery runs -- the capacity at which U.S. refineries are operating -- increased by 0.1 percentage point from last week's high of 85.6 percent.
But gasoline stockpiles were expected to have dropped by 625,000 barrels ahead of the peak demand driving season, the analysts predicted, while stocks of distillates, which include heating oil, are seen rising by 830,000 barrels.
Analysts expect oil stockpiles grew last week by 1.6 million barrels, according to a survey by Platts, the energy research arm of McGraw-Hill Cos. For the week ended April 18, crude-oil inventories increased by 2.4 million barrels, or 0.8 percent, to 316.1 million barrels, which were 5.6 percent below year-ago levels.
Gasoline inventories fell by 3.2 million barrels, or 1.5 percent, to 212.6 million barrels, which were 7 percent above year-ago levels. Analysts expect stockpiles of the motor fuel fell by another 800,000 barrels last week.
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