For a minute there I thought I had to get off my couch, when all the while the fact is we don't have to do anything much but keep things afloat for just a few decades more! In fact, we'd best shut up about PO, because if our offspring finds out we knew about it all along, they'll turn and wring our necks come 2036!
Posted: Mon May 12, 2008 8:34 am Post subject: Weekly US Petroleum and NG Supply Reports (Current)
Another hundred pages, time for another new thread.
The '07-'08 thread lasted about 13 months, compared to the original thread which took about 2 years to get to 100 pages.
The '07-'08 thread had 1480 posts, and 144,353 views, for a rate of nearly 100 views per post. This is an increase over the original thread, which received about 84 views per reply. By this measurement, this is still one of the most frequently viewed threads on PO.com
What this also shows is that a lot of people view this thread regularly, and in fact most weeks, this thread gets anywhere from 2500 to 3000 views, which is pretty respectable for a few people on the internet.
So thank you, to all of the fellow posters and faithful readers, who are using this thread as an important source of information and analysis on these reports.
I am not smart enough to predict that this week will be any different from last week. The last couple of weeks we have seen a flood of imports in both crude oil and unleaded (not distillates) and lower than normal refinery utilization, because of the high crude oil prices and relatively low refinery margins.
The unleaded inventory will be especially interesting. We should be in the time of year when this inventory is built up to take care of summer demand, and the numbers themselves suggest that there is plenty of gas around, but even with fairly strong imports of 1.4 mbpd, the demand lately has been such that with the refinery system running the way it was last week, at about 85% capacity, we will still see a slight draw down in unleaded inventory. The longer this goes on, the more serious it is going to get.
In crude oil, I have assumed above the same low inputs to refineries, high imports (despite the pricing) and the same domestic production we always have, and the result is a pretty strong build.
In distillates, we saw a little bump in demand last week, with spring planting just underway, and very low net imports, and if that same thing happens this week, with typical production levels of 4.2 or so, we will see this inventory break just about even.
Here are the stats for the year-to-date. Despite being slightly ahead of the analysts on closeness to reality (over 50%, which as we all know was my long term goal) the pesky analysts are beating me on average deviation from reality in crude oil and unleaded, by a statistically significant margin.
The reason for this is that my little unleaded demand model underestimated demand consistently in Jan-March (it has been pretty close the last couple of weeks) and also, the lack of ability to predict crude oil and unleaded imports. Of the first roughly six months of the year, I have only managed to correctly predict crude oil imports once.
Other than that, pretty good. Now that I understand the seasonality a little bit better, it should be possible to refine this demand model some.
The crude oil imports are up to the Saudis, Mexicans, and weather conditions in the Gulf, so I do not feel too bad about that.
Thanks for your help as we continue to try to understand this important data a little better, to keep with the original goal of the thread, which is to use these reports as a potential indicator that the effects of PO are being felt in the US.
Posted: Wed May 14, 2008 8:22 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
Quote:
Analysts expect oil stockpiles grew last week by 2.5 million barrels, according to a survey by Platts, the energy research arm of McGraw-Hill Cos. For the week ended May 2, crude-oil inventories rose by 5.7 million barrels, or 1.8 percent, to 325.6 million barrels, which were 3.6 percent below year-ago levels.
Analysts expect stockpiles of the motor fuel fell by 800,000 barrels last week. The prior week, gasoline inventories rose by 800,000 barrels, or 0.4 percent, to 211.9 million barrels, which were 7.6 percent above year-ago level
U.S. supplies probably gained by 2.25 million barrels last week, according to a Bloomberg survey before the Energy Department's report today.
Quote:
Stockpiles of distillate fuel, a category that includes heating oil and diesel, probably increased 1 million barrels from 105.7 million barrels the prior week, the survey indicated.
Analysts were split over whether gasoline inventories rose or fell last week. Supplies probably declined 220,000 barrels from 211.9 million barrels the prior week, according to the median of responses. Fifteen analysts gave product-supply estimates. Nine of the analysts forecast a decline and six said there was an increase.
Joined: Sep 16, 2004 Posts: 4274 Location: Southwest WI
Posted: Wed May 14, 2008 9:33 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
Quote:
Summary of Weekly Petroleum Data for the Week Ending May 14, 2008
U.S. crude oil refinery inputs averaged nearly 15.1 million barrels per day
during the week ending May 9, up 405,000 barrels per day from the previous
week's average. Refineries operated at 86.6 percent of their operable capacity
last week. Gasoline production moved higher compared to the previous week,
averaging 8.9 million barrels per day. Distillate fuel production increased
last week, averaging about 4.4 million barrels per day.
U.S. crude oil imports averaged 9.9 million barrels per day last week, down 695
thousand barrels per day from the previous week. Over the last four weeks, crude
oil imports have averaged 10.2 million barrels per day, 9 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 915 thousand barrels per day. Distillate fuel imports averaged 216
thousand barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased by 200 thousand barrels from the previous week. At
325.8 million barrels, U.S. crude oil inventories are in the middle of the
average range for this time of year. Total motor gasoline inventories decreased
by 1.7 million barrels last week, and are in the middle of the average range.
Finished gasoline inventories fell last week while gasoline blending components
inventories increased during this same time. Distillate fuel inventories
increased 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 1.5 million
barrels last week. Total commercial petroleum inventories increased by 5.0
million barrels last week, and are in the middle of the average range for this
time of year.
Total products supplied over the last four-week period has averaged 20.5
million barrels per day, down by 0.3 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, down by 0.2 percent from the same period last year.
Distillate fuel demand has averaged 4.2 million barrels per day over the last
four weeks, up 0.8 percent from the same period last year. Jet fuel demand is
5.3 percent lower over the last four weeks compared to the same four-week period
last year.
GASOLINE DEMAND DOWN!!! _________________ "Oil is going up because we use too much oil, and the capacity to replace reserves is dwindling"
-President Bush 11/07/07
In this report net imports down -587K yoy and we have a drop in demand of ~19K a day. These two figures have to match to have a healthy inventory level going forward, right?
This week, the refiners increased their output by a percent or so, and produced about equal amounts of extra unleaded and extra distillates. The distillate production increased to 4.4 mbpd, the unleaded went from 8.7 to 8.9. We still have a long way to go to get to summerlike production levels, however.
In imports, we saw a big decrease in unleaded imports, and crude oil imports still hovering around 10, lower than the past several weeks. The combination of higher crude oil inputs to refineries, along with reduced imports were the main drivers of a lack of inventory build, which the market will probably view as a bullish signal.
It has been hard recently to predict what will drive the market. In this case, it might be the lack of a crude oil inventory build, it could also be the decrease in unleaded inventory. This scenario could provide us with the little correction we have been waiting for in distillates, and closing of the gap between distillates and the RBOB, along with continued increases in crude oil prices.
But, for all we know, some sharp analyst like Phil Flynn will look at the .2% decline in unleaded demand and say "crisis over, all is well".
Joined: Sep 16, 2004 Posts: 4274 Location: Southwest WI
Posted: Wed May 14, 2008 10:16 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
Pup-
Do you remember the last time we had a drop in gasoline demand (YOY)? So $3.50 gasoline was the trigger? Going to need a hell of a lot more demand destruction if gasoline production doesn't pick up...$5 gasoline! _________________ "Oil is going up because we use too much oil, and the capacity to replace reserves is dwindling"
-President Bush 11/07/07
Joined: Apr 05, 2005 Posts: 2395 Location: South of Atlanta
Posted: Wed May 14, 2008 11:12 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
This demand thing is what everyone points to for comfort. I just don't get it. The words are used by the pundits and the analysts with no numbers or comparisons attached.
Its just another nail in the coffin of denial IMHO. .2% is pretty laughable actually at these costs. We need much larger whole numbers to really matter. I doubt we'll ever have the chance as old Jevon will be showing up shortly saying all is well. With any retracing in gasoline prices demand will go right back where it was or higher due to our inability to do anything measurable to solve the problem.
Posted: Wed May 14, 2008 11:52 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
It is quite common for there to be a decrease in products supplied vs. the previous year. The argument can further be made that the 61,000 barrel per day decrease amounts to roundoff error in this data anyway.
In fact, since 1992, this has occurred about 33% of the time.
I do have to say that it looks like there has been a mellowing of product supply growth since roughly last July, which is when the big stock market correction happened. Since July 6th last year, there has been a decline in unleaded products supplied vs. the previous year about 55% of the time, so higher than the historical average.
Posted: Wed May 14, 2008 12:41 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
We need to be very careful with proclamations of demand destruction because the statistics lend themselves very nicely for cherry picking.
For example, while demand may be down year-on-year by less than a percent, demand actually increased (both by weekly and 4-week average) between the prior week's report and this week's report.
Or, for a more extreme example:
Based on EIA figures, weekly gasoline demand in the US increased from 9.311 million barrels per day the week ending 5/2 to 9.343 million barrels per day the week ending 5/9, which is an annualized rate of increase of 17.8%!!!
OK, OK... I'm just stretching figures to make a point. I realize that demand increase this time of year is normal, that per capita demand is usually not considered, etc. I just worry when the media rushes to tell us that demand is decreasing, when the decline is so minor, and especially when for 3 of the last 6 weeks, weekly demand has actually risen year on year per EIA's figures. They rarely include that in their reporting...
Posted: Wed May 14, 2008 2:16 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
Thought I would throw this in here for pup55 to digest.
Quote:
That's because Valero wants to make more diesel, not gasoline. More refiners should do so, and some are, including those based in San Antonio.
The biggest profits are in diesel right now. Gasoline profits have shrunk because demand is steady to flat while inventories remain high. The record cost of crude oil drives up the cost of gasoline, diesel and other fuels.
Because of rising diesel demand, prices for it have increased faster than those for gasoline. Higher prices boost the cost of operating trucks, farm equipment and military vehicles.
On Monday, diesel prices averaged $4.33 a gallon nationally, up 18 cents from the week before. Diesel averaged about $2.40 in early 2007.
To capitalize on diesel's larger profit potential, at least three of San Antonio's public companies are increasing diesel production or have plans to do so. That qualifies San Antonio as a key diesel center.
Posted: Wed May 14, 2008 4:02 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
pup55 one of the parts of US oil supplies that I least understand is it seems we are able to import gasoline almost without limit. The European demand for diesel partially explains this but on the flip side as oil gets more expensive you would think that they would optimize their refineries for diesel. Wondering if someone can shed light on US gasoline imports. At some point you would think that competition for crude would lead to a limit on US gasoline imports. Once we don't have enough crude to supply the countries that send the US gasoline then we will have peak gasoline imports.
The US if it was willing to outbid these countries for crude would not then be able to also get increases in gasoline imports from these same countries. I'd say that right now given that oil production has been basically flat and China, India demand is up that the amount of gasoline available for export has probably reached a limit.
Any attempts to increase gasoline imports into the US would lead to shortages elsewhere. Although variable and surprisingly high on occasion we have barely topped 1.6 mbd in May of 2006,2007.
The question then becomes can it go to 2.0 mbd ? as overall oil production declines ?
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