Like the illusion of Wall Street, with its vast and powerful investment banks, now shuttered, China too is an illusion perpetuated by the Globalists that gave us the 15,000 mile Caesar salad, poisoned cat food and lead based paint on babies' pacifiers. Like the illusion that money would come from thin air to always push housing prices higher, China has spent a generation pursuing its illusion. Pursuing an unattainable dream to be like the West, while 6000 years of its carefully shepherded top soil blows into the sea.
I usually do a graph, but here is a little spreadsheet.
The first column is the 2007 "demand" for the equivalent week a year ago. The second column is the 2007 demand minus .2 mbpd, to reflect what is going on the last couple of weeks in the real world. We will make this the "model assumption" for this analysis.
The third and fourth columns are the available supply. At a refinery utilization of 87%, which is where we are consistently running, the unleaded production is 9.05 mbpd, and we are importing about 1 mbpd right now.
The next column is the daily net supply/demand (negative means an inventory draw) and the next column after that is the weekly net supply/demand.
The last column is the inventory level. Right now, it's 209.2 million barrels.
If things keep going the way things are, with demand the way it has been the last couple of weeks, and production at 87%, we will get down to 194 million barrels right after Labor Day. We will continue to have pretty big drops in unleaded inventory until then. After that, the seasonal lower demand will take over, and the inventory will start to increase again.
This model of course allows you to put in any assumptions you want about demand, production and imports, and whatever else. If demand is actually .5 lower than it was in 2007, instead of .2 lower, for example, then there is an extra 2.1 million barrels per week, approximately, available.
There is of course the ongoing question as to what our true MOL level is, as we all know.
But, this is the number we are looking at, everything else being what it is.
Note: The above table is in thousand barrels per day, which is how the EIA thinks. I think in Million barrels per day, hence the difference in decimal point.
Joined: Oct 23, 2004 Posts: 5928 Location: New Jersey
Posted: Thu Aug 07, 2008 3:57 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
Thanks pup55.
I mentioned somewhere back about the loss of Nigerian crude along the East Coast, being that Nigerian crude was optimized by eastern refiners to produce the most gasoline.
Well that was before. Now things have changed:
Quote:
Sunoco: No major refinery maintenance left in 2008
Thu Aug 7, 2008 4:54pm EDT
Sunoco, he said, plans to slash purchases of Nigerian crude oil, which it uses in its Northeast refining system.
"We plan to significantly reduce our purchases of Nigerian-sourced crude in the third quarter to approximately 90,000 barrels per day versus historic levels of more than 300,000 bpd," Delaney told the analysts.
Apparently Sunoco is using the fall in Nigerian oil supplies to its advantage by attempting to obtain oil more easily refined into
distillates (I'm not sure where such oil would come from).
Anyway my point being is that refiners have switched from optimizing production for gasoline to optimizing for diesel and heating oil, as much as possible that is.
The bottom line is that we may well see US gasoline production dropping even faster than the drop caused by "demand destruction" (or is it lack of cheap supplies?). A worrying thought in regards to MOLS if gasoline imports don't hold up. _________________ It's already over, now it's just a matter of adjusting.
Posted: Fri Aug 08, 2008 8:19 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
Here is the ship channel, 8 hours ago.....
About 25 ships out there last night, when we started checking on this last spring, it used to be unusual to see 13-14.
When we checked in a week or so ago, before the hurricanes, it was similar. So there appears to be no difference in the backlog because of the two days of downtime caused by Edouard this week, based on this.
Anyhow, the big question of the week: what were the effects of Edouard on the crude oil and finished product imports?
I think the base import level is about 10.2 right now. This is up from 9.7 or 9.8 which it was six weeks ago. I think the imports will be high until the inventory gets up to about 310 million barrels this fall.
So were there any hurricane effects? I can only go with the information I have, which is to count the tankers on Vesseltrax every Friday, and see if the backlog changes at all. This week it did not. I fudged a little and called it 10.1 instead of 10.2, but I still think there is a lot of crude oil around right now.
For Refinery utilization, I think a couple of the refiners on the gulf coast cut back last week, so we will see about 86.5 rather than 87, which is what it has run lately. This method of extrapolating the production of crude oil and distillates from the refinery utilization is mainly successful.
For unleaded demand, I think we will continue to be on the trend of recovered demand, per our little graph of last week. I think about .2 mbpd less than last year's demand for this period should give us a pretty big draw in unleaded. The little spreadsheet model we did above predicts this as well.
So a draw in unleaded, about even in distillates, and a small build in crude oil.
Joined: Oct 23, 2004 Posts: 5928 Location: New Jersey
Posted: Mon Aug 11, 2008 3:04 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
Thanks pup55 once agian for your excellent analysis.
Indications are getting more numerous that the days of plentiful gasoline supplies are passed - something which has occurred even as the retail gasoline price has fallen steeply lately. There are
some industry reports now that gasoline inventories are getting 'low', so there is some reason to believe gasoline inventories did fall 2 million barrels or more last week. It also appears that refinery utilization may have indeed fallen to even lower levels of about 86.5%, as pup55 says.
Lower prices will ironically accelerate demand into the important Labor Day holiday, and will likely push gasoline inventory levels to their lowest point of the year by then.
While we are still some days away from spot shortages somewhere, wholesale prices have risen daily vs. the rest of the country in the upper Midwest for 10 days now. If there are shortages, expect them to show up there first.
Part of the reason for Midwest problems is due to the cumulative number of operational problems in various refineries in that general area, including a new one today.
Quote:
Marathon: KY refinery cuts rates after pipe leak
Mon Aug 11, 2008 8:50pm BST
NEW YORK, Aug 11 (Reuters) - Marathon Oil Corp (MRO.N: Quote, Profile, Research) confirmed on Monday that its 222,000 barrel per day refinery in Catlettsburg, Kentucky, was at reduced rates after a crude oil pipeline supplying the refinery ruptured.
"The refinery is still operational, but the crude throughput rate has been reduced," Marathon spokesman Robert Calmus said. "We will, of course, resume normal operations at the refinery as soon as the pipeline is repaired."
There was currently no timetable for the pipeline restart, Calmus said.
Valero says Port Arthur hydrocracker still shut
Mon Aug 11, 2008 2:55pm EDT
NEW YORK, Aug 11 (Reuters) - Valero Energy Corp (VLO.N: Quote, Profile, Research, Stock Buzz) said on Monday that overhaul work was still ongoing on a 45,000 barrel per day (bpd) hydrocracker at its 295,000 bpd Port Arthur, Texas oil refinery.
Sources familiar with refinery operations had said on Friday that Valero was set to finish a 38-day overhaul on the hydrocracking unit over the weekend.
"The turnaround at the Port Arthur refinery hydrocracker remains under way," Valero spokesman Bill Day said in an email.
Posted: Tue Aug 12, 2008 4:28 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
Yes, as always, we must thank Pup for another excellent weekly prediction.
If I had to change anything in Pup's analysis, I would go for 10 Mb/d of crude imports, instead of 10.1.
(I find if hard to believe that, last week, most GOM bound tankers – from Venezuela, Nigeria, etc. – could keep up with the standard approach routes and timings.)
Posted: Tue Aug 12, 2008 4:56 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
Quote:
A Reuters poll of analysts ahead of weekly U.S. inventory data due out on Wednesday forecast crude stocks fell by 200,000 barrel last week, gasoline stocks fell by 2.1 million barrels, and a 1.9 million barrel build in distillates
Well, if this is the case, then I am off by about 1.7, which means a bit more than .2 mbpd imports, so the "analysts" in this survey are thinking 9.8 or so.
Posted: Wed Aug 13, 2008 5:11 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
Quote:
Inventories of crude oil probably rose 300,000 barrels in the week ended Aug. 8 from 296.9 million the week before, according to the median of responses by 13 analysts.
Hmmm... I am off only about .8 on this one, so Evidently the "Bloomberg" analysts think that the crude imports were around 10, like Ming does.
Quote:
Analysts are split over whether U.S. crude-oil inventories fell or rose last week because of the impact of Tropical Storm Edouard, according to a Bloomberg News survey.
Here is another case where some guy on the internet can go out on a limb a little bit, compared to someone who actually gets paid for this sort of service. This will be a test of using Vesseltrax to estimate the tanker backlog in Houston.
Quote:
I'm on vacation this week, and may not return soon.
This sounds kind of ominous, DP.... novels have been written on less than this.
Joined: Sep 16, 2004 Posts: 4927 Location: Southwest WI
Posted: Wed Aug 13, 2008 8:41 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
Quote:
Summary of Weekly Petroleum Data for the Week Ending August 8, 2008
U.S. crude oil refinery inputs averaged 14.8 million barrels per day during the
week ending August 8, down 216 thousand barrels per day from the previous week's
average. Refineries operated at 85.9 percent of their operable capacity last
week. Gasoline production fell last week, averaging about 8.9 million barrels
per day. Distillate fuel production decreased last week, averaging 4.3 million
barrels per day.
U.S. crude oil imports averaged nearly 9.7 million barrels per day last week,
down 538 thousand barrels per day from the previous week. Over the last four
weeks, crude oil imports have averaged 9.9 million barrels per day, 100 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 785 thousand barrels per day. Distillate fuel imports averaged 136
thousand barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) decreased by 0.4 million barrels from the previous week. At
296.5 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 6.4 million barrels last week, and are in near the lower boundary of the
average range. Both finished gasoline inventories and gasoline blending
components inventories decreased last week. Distillate fuel inventories
decreased by 1.7 million barrels, and are in the upper half of the average range
for this time of year. Propane/propylene inventories increased by 2.0 million
barrels last week but remain below the lower limit of the average range. Total
commercial petroleum inventories decreased by 5.4 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 nearly 20.2
million barrels per day, down by 2.8 percent compared to the similar period last
year. Over the last four weeks, motor gasoline demand has averaged 9.4 million
barrels per day, down by 1.9 percent from the same period last year. Distillate
fuel demand has averaged 4.2 million barrels per day over the last four weeks,
up by 4.3 percent from the same period last year. Jet fuel demand is 8.5 percent
lower over the last four weeks compared to the same four-week period last year.
Holy cow thats a big drop... _________________ Clothing should be optional.
Posted: Wed Aug 13, 2008 8:52 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
frankthetank wrote:
So when do the shortages start? This can't continue without some issues, can it?
Net imports were down just over 1 mbd over last week. Probably a temporary glitch due to storms. OTOH, we are only a couple of weeks away from SPR drawdowns.
Looks like the Reuters analysts were better than the Bloomberg analysts at judging the crude oil imports, which turned out to be 9.7, which was obviously affected by the storm. This of course means that there is about 2 million barrels of crude oil floating on the Gulf of Mexico which will probably find its way into the report next week, when they catch up.
Refinery utilization was lower than I thought this week, and this may have been due to the weather situation as well as the problems DP pointed out, but the unleaded to distillate ratio was about what it has been.
The unleaded demand, which we have been following carefully, has been consistently higher for the last three weeks, after the price dropped under $4. The "products supplied" data also reflects this: They say demand is down only about 1.9%, this compares to 4-5% in the July 4 time frame.
Respectable forecasting, all in all. For the year, I am still 47-46 vs. the analysts, just over 50%.
How the market will react to this is anyone's guess. I will say, though, that this situation with the unleaded ought to be monitored for awhile. At this rate of decline, we will be at or around 193-194, thought to be the MOL, within a couple of weeks.
Posted: Wed Aug 13, 2008 9:13 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
pup55 wrote:
[code]
Refinery utilization was lower than I thought this week, and this may have been due to the weather situation as well as the problems DP pointed out, but the unleaded to distillate ratio was about what it has been.
The unleaded demand, which we have been following carefully, has been consistently higher for the last three weeks, after the price dropped under $4. The "products supplied" data also reflects this: They say demand is down only about 1.9%, this compares to 4-5% in the July 4 time frame.
Respectable forecasting, all in all. For the year, I am still 47-46 vs. the analysts, just over 50%.
How the market will react to this is anyone's guess. I will say, though, that this situation with the unleaded ought to be monitored for awhile. At this rate of decline, we will be at or around 193-194, thought to be the MOL, within a couple of weeks.
"How Frequent are EIA Data Revisions
Khebab did an analysis of EIA data revisions back in October 2006. His analysis showed that at that time, crude estimates on average were revised down by about 300,000 barrels from their initial estimate. The downward revision took about three years. Estimates of other liquids tended to get revised upward over time. On a "total liquids" basis, one might expect some offset, since part is being adjusted upward and part downward."
Joined: Apr 16, 2008 Posts: 121 Location: Western PA, USA
Posted: Wed Aug 13, 2008 9:51 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
pup55 wrote:
[code]Unleaded 7-Aug
The unleaded demand, which we have been following carefully, has been consistently higher for the last three weeks, after the price dropped under $4. The "products supplied" data also reflects this: They say demand is down only about 1.9%, this compares to 4-5% in the July 4 time frame.
I thought gasoline demand was only down 2.4 percent at its most a few weeks back compared to a year ago? According to the inventory report, products supplied fell by 2.8 percent from last year, not 1.9 percent.
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