EIA Review

CRUDE: OK, I was wrong.  Actually I think I’m only a week off on my timing because this week’s BUILD (+2.1M, 379.7) wasn’t all that bullish when you break out the stats.  Where I did miss was on the RUNS/UTIZ (-79, 15.129; -0.1, 86.6).  We’re stopping the slide here and from the news I’m seeing, we’ll be back on track come next week.  Now when we look at this build, it’s noteworthy to see that the big build in crude came on the West Coast in PADD5 (+1.7M).  Not that we’re discounting anything, anywhere ( I hate that), but we have to make sure we understand that the only areas that are still bringing in IMPORTS (-376K, 7.101) are PADD2 (Canadian) and PADD5 (Saudi, Ecuador, Iraq).  This is a pretty telling tale of what I’ve been preaching, the more we see DOMESTIC PRODUCTION (+36K, 8.970), the more we shut the door on OPEC.  This is also going to eventually make CUSHING (+800K, 21.3) irrelevant as a place to measure benchmark since it’s all about what’s coming in, what’s going out and where it lands…storage levels are useless.

GASOLINE: And that’s what I get for trying to be cute.  I missed this DRAW (-1.2M, 203.1), but if only this were checkers or hand grenades.  The PRODUCTION (-81K, 9.467) slipped a little and as well it should have.  We’re running pretty short on distillates and with gasoline prices so low, we can afford to let that rise on smaller inventory.  We will though have to pay attention to the fact that DEMAND (+31K, 8.867) is not going anywhere anytime soon.  The weather has been good and the outlook for the consumer is looking confident.  We’re going to be getting a healthy does of miles on the road this Winter.  I’m thinking that soon enough we’re going to see a need to increase IMPORTS (+55K, 493.0) a lot more to make sure we’re able to not crimp the holiday cheer.

DISTILLATE: Then there’s the coup de grace; a huge DRAW (-5.3M, 120.4).  The appropriately scary thing is that this number includes a -5.6M barrel draw of ULSD (<15ppm).  I know I have been thinking about a strong season of consumption, travel and manufacturing, but the DEMAND (+617K, 3.926) is looking like it’s off to a hot start.  We know that there’s a lot of volatility in the EIA numbers for this demand week to week, but a lot more of it has to do with EXPORTS (+53K, 3.607).  Of that jump in the export number, we saw the jump in distillates (+107K) to a record 1.341M b/d.  That’s going to keep the impetus on more PRODUCTION (-133K, 4.471) as refineries come back from turnarounds.

EIA Review 10.16.14

CRUDE: If you’re following me on Twitter (@oiloutlooks), you know I care little about these stats and I laugh at this BUILD (+8.9M, 370.6).  For what it’s worth, we were at 375M barrels of crude in inventory at this time last year, but we were also seeing crude RUNS (-233K, 15.321; -1.2, 88.1) at 14.855M b/d.  Uh yeah, that’s 466K b/d less than what we’re using right now.  So no matter how you think that oil inventories are better on a ratio to runs, we’re using a lot more.  Then let’s take notice that DOMESTIC PRODUCTION (+76K, 8.951) is not slowing down despite the falling crude prices.  We’re going to be above 9M b/d in a week or two and I was the one telling people this months ago.  The fact is that we’re going to continue using our own crude as long as IMPORTS (+28K, 7.740) are running close to $3 above WTI.  As if it matters, CUSHING (+700K, 19.6M) is building, but with the runs down so much, what’s the issue here?  Moving along.

GASOLINE:  I’m tired trying so hard.  Well no duh we’re seeing a DRAW (-4.0M, 205.7).  This is what was going to happen when we took down refineries and eased PRODUCTION (+238K, 9.508).  Hold on there one minute Cletus, we actually increased production.  Uh oh.  That means that gasoline DEMAND (+398K, 9.043) is killing it and with those Jobless Claims today, we’re going to see this just keep on keeping on into the end of the holiday spending year.  Again, with Brent so expensive and refining margins so poor in the EU, we can skip IMPORTS (+9K, 428.0) for any love.

DISTILLATE:  OK, this is how it’s supposed to work.  We DRAW (-1.5M, 124.6) and it happens when refineries are in maintenance.  The PRODUCTION (-166K, 4.582) is slipping as those crude runs come down.  The difference here is that you just can’t increase supply by just blending together a few components.  The DEMAND (+212K, 3.710) is solid and again, the holiday season is only going to kick this up another notch. The one thing to watch though is the other side of IMPORTS (+98K, 145.0).  I’m talking about EXPORTS (UNCH, 3.554) and specifically, the disty number which is holding at 1.234M b/d.  Any refinery shut ins out of the EU and we’ll be figthing hard to keep the commercial fuel prices low.

 

EIA Review 10/8/14

CRUDE: Please remain calm.  Just because we saw a big BUILD (+5.0M, 361.7) there’s no reason to go all Chicken Little on me and start talking this $80 BS.  We were here in 2012 and we’re all Slim Shady and back again.  The facts here is that the only way we can build crude inventories in the us is by cutting RUNS/UTIZ (-135K, 15.554; -0.5, 89.3)and increasing IMPORTS (+428K, 7.712).  That’s a pretty big swing considering that this is the third highest total of weekly imports we’ve seen all year.  Keep in mind too that this is the highest we’ve been running this much crude this late in the year ever.  Hey need more reason why crude built this much, well because it so cheap we decided to bring in all those imports despite DOMESTIC PRODUCTION (+38K, 8.875) getting closer to 9M.  Speaking of imports, it’s an interesting combo here with Canadian imports hitting a record 2.5M b/d and CUSHING (-1.6M, 18.9).  Granted P2 inventories look flooded at 91.6M, but those hub barrels are pushing down to the USGC and what gets pushed out from there will be imports.

GASOLINE: Curse you damn open arb!  The BUILD (1.2M, 209.7) wasn’t even on my realm of possibility list.  Again, I couldn’t imagine that PRODUCTION (+32K, 9.270) was going to be higher when we added in blending.  It goes to show that the refiners know that DEMAND (-15K. 8.645) is not going anywhere and it’s really important to keep supply, well. supplied.  As expected, IMPORTS (-102K, 402.0) just keep slipping away.

DISTILLATE:   I guess I can get a little love here with this small BUILD (400K, 126.1).  Sometimes it pays to be on the right side of the build/draw, but it’s such a slippery slope these days.  Well oiled.  Not a lot to really shock here as PRODUCTION (-157K, 4.748) managed to fall enough to offset the drop in DEMAND (-619K, 3.498).  Actually, that drop in demand was heartbreaking and ridiculously confusing.  We’ve been here before and we know if there’s any volatility left in the oil market, it has to be in disty demand.  I can almost lock in that demand will be above 4M b/d next week.  IMPORT (+16K, 44.0) numbers didn’t move and neither did EXPORTS (UNCH, 3.554; DIST UNCH, 1.234).

EIA Review 10.1.14

CRUDE: Ladies and gentlemen, “Sexual Chocolate!” and this is where I drop the mic and walk off stage.  I pegged this week’s DRAW (-1.4M, 356.6) and haters gonna hate.  RUN/UTIZ (-525K, 15.689; -3.6, 89.8) was a shock to the system and it almost makes my call inexplicable.  You know what folks, what matters is the bottom line and not how I got there.  I am not getting judged on the construction of the road, I’m here to make sure you get from A to B in a profitable way.  You want details, go ask that quant in the corner that nobody will talk to.  Results are what matter and don’t let some management change cult leader tell you differently.  Now let’s get back to reality.  The other miss here was IMPORTS (+414K, 7.284).  I’m happy to see PADD2 (2.008M b/d) and the Canadian love continue, but it looks like the gates were open to our OPEC friends in PADD3 again (3.340M).  I’m not all sure that continues in the USG, so let’s not get too pumped up.  DOMESTIC PRODUCTION (-30K, 8.837) hit a snag with 27K b/d coming off in the Lower 48.  We’re expecting that to adjust back up and it might be some backing up in Eagle Ford that took off the edge.  Sticking to the middle of the US, CUSHING (+300K, 20.5) is not really moving like most thought, up or down.

GASOLINE: Oh so right and oh so long.  Another winner here this week with my call for a DRAW (-1.8M, 208.5).  Please no calls, I’m coming so close that I might draw attention.  Now I want everyone to pay attention here because this is so important.  Notice the weaker DEMAND (-121, 8.660) and the PRODUCTION (-479, 9.238).  For all the hype about moderate gas demand in the US, production above 9M b/d is nothing to sneeze at.  The bottom line though is we drew nearly two million barrels.  If maintenance does really drive us to lower production from here and we continue to see job growth, that demand is not going anywhere.  We can put in a call for hope for IMPORTS (-6K, 504.0), but don’t expect much help.

DISTILLATE: Look, you can’t expect to win ever hand.  I missed badly on the DRAW (-2.9M, 125.7) here.  Part of the reason is I’m not as dialed into EXPORTS (+218K, 3.554) as I should be.  Lat Am was pulling in a lot of cargoes of disty this month and we see dist exports this week rise 34K b/d.  I just wasn’t looking for DEMAND (+367L, 4.115) to make this big of a leap and I let that slip past me.  PRODUCTION (+32K, 4.907) tocked up just as I thought it would, but it couldn’t keep up with the takeaway.  I guess there’s always next week.

EIA Review 9.24.14

CRUDE: Of course there was a DRAW (-4.3M, 358.0) because like crude and all the other products, I was on target.  If only they had weekly lines on American Idol, I’d be rich.  Week in and week out I do the world’s most thankless job other than the guy doing advertising for Charmin.  You get what you pay for, but someone has to make it work.  So moving on, the big deal here is that IMPORTS (1.244M, 6.840) for the first time on record have come in under 7M and crude RUNS/UTIZ (-90K, 16.214; +0.4, 93.4) have been over 16M.  This highlights some of the points I was making this morning in the Newsletter.  This is the US and oil independence.  As a ratio, we’re bringing in 58% of the barrels totaled in PADD3 into PADD2.  The past three years, that number was only 38% and that number has risen to 60% since June.  Bottom line, more Canadian, less OPEC.  This will help bring back some validity to CUSHING (+191K, 20.2) and keep our rising DOMESTIC PRODUCTION (+29K, 8.867) in focus.

GASOLINE: Yes, we saw this DRAW (-400K, 210.3) coming and it was just a little shy of what we thought.  The one thing that we were on target was the DEMAND (+74K, 8.781) unwavering.  Not like the late in the year demand should be surprising anyone, we’re going to continue to come up short.  The thing is we didn’t see a lot of demand in summer and the conventional thinking is that we’ll see less in Fall/Winter.  Well funny how job growth can mess with that.  Now were going to have to hope for the best on PRODUCTION (477K, 9.717).  I will say that this week’s jump was well beyond my thinking.  Of course with refinery utiz higher and runs lower, a lot of blending took part here in an effort to keep the thirst quenched.  IMPORTS (+183K, 510.0)  also have picked up the pace, but we’re not going to try to pick up this pace so late in the season.

DISTILLATE: And finally we come to the one BUILD (+800K, 128.6) that we see on the board and the one that we were looking for.  Again we’re dealing with moderate DEMAND (-80K, 3.780) and continued solid PRODUCTION (-35K, 4.875).  Here in disty more than anywhere else, we’re keeping a careful eye on the rest of the world.  We’re still pushing out EXPORTS (UNCH, 3.336) at 1.2M b/d for distillates.  IMPORTS (+33K, 190.o) seem to be coming over here so it’s tough to think about expanding our exports if foreign producers are still looking for us to pick up the cheap.

EIA Review 9.17.20144

CRUDE: OK, I didn’t see this BUILD (+3.7M, 362.3) coming, but who did and why would we.  The bulk of the build hit the coasts with P1 +1.4M and P5 +2.3M.  Considering the price of Brent has been leveling off against WTI lately, it almost makes me think that we’re just pulling in real cheap IMPORTS (+493K, 8.115).  Most of the barrels coming into the US were as we just noted in P1 (+460K, 998K) and P5 (-11K, 1.177).  More interesting is the CUSHING (-400K, 20.0) inventory level.  The build was a bit lower than I expected, but one of the reasons is actually imports.  The Canadian imports are at a new weekly high after setting a record last week.  This week’s 2.238M b/d is huge.  If you haven’t been paying attention to the Newsletter, you’d best catch up.  There won’t be much time left to say goodbye to the Brent contract.  In the meantime, we’re not seeing any real loss of production from refinery maintenance.  We hit the 12th week in a row with crude RUNS/UTIZ (-28K, 16.304; -0.9, 93.0).  Mo money, less maintenance.

GASOLINE: Before I take a bow on hitting the DRAW (-1.6M, 210.7) number right on the schnozz, let’s discuss the poor showing on DEMAND (+95K, 8.707).  I am having a real tough time actually believing this number coming in so weak.  Tough to think we go from 9.3M b/d and then drop two weeks in a row under 8.8M.  One would think that with lower prices and a solid pace of job growth, we’d see demand still strong or at least stronger than this.  Although, this is really about something I’ve been adamant about and that’s the lack of IMPORTS (+3K, 327.0).  That brings the 2014 average under 550K b/d (547.3)and the lowest since 2000 (525K).  On the other hand, we’re keeping this low because we’re still pushing out PRODUCTION (-257K, 9.240) at a hot pace.  In comparison to 2000 when we were importing so low, production was only averaging 8.225M b/d.  2014 you ask?  9.650M b/d.  Damn.

DISTILLATE:  Granted I the BUILD (+300K, 127.8) was all that I had hoped for, I’ll take some solace in the fact I’m on the right side of the inventory.  We were expecting the DEMAND (+427K, 3.830) to pick up and we thought there would have been enough PRODUCTION (-191K, 4.910) to keep up and get ahead.  IMPORTS (+72K, 155.0) even pushed in more inventory to match the rising production yield.  So the thing I’m concerned about here is that if demand does pick up, either domestically or on EXPORTS (UNCH, 3.336) that have stayed solid at 1.2M b/d for disty.

EIA Review 9.10.14

CRUDE: Just starting with this week’s DRAW (-1.0M, 358.6) I was about to get all excited that I was going to knock it out of the park.  I’ll get to that in a second.  Just sticking to the crude oil stats I was looking sharp.  The RUNS/UTIZ (-96K, 16.632; +0.6, 93.9) were all inline with everything I was thinking.  The only reason that I missed out on the last 500K I had posted was that I didn’t see the DOMESTIC PRODUCTION (-40K, 8.590) coming.  Yes, that is going to take some explanation.  See we dropped 100K b/d in Alaska, but we increased another 60K b/d in the Lower 48.  That’s where we’re seeing more crude coming into the real refining system and where we had more build than draw.  Confusing, I know.  I whiffed on CUSHING (+100K, 20.4), but the way the rest of these numbers fell out, I am losing a lot of faith as we go forward.  I even have a lot of doubt about this IMPORT (=54K, 7.621).

GASOLINE:  OK, ladies and gentlemen, please fasten your seat belts we’re losing cabin pressure fast.  No way we can put faith into this BUILD (+2.4, 212.4).  Maybe it’s my fault for laughing so much at the BLS and the Unemployment numbers last week.  I told them welcome to my world, but it’s been a while since I had to actually question anything like this.  WE go in for the kill right away dismissing the inexplicable fall in DEMAND (-869M, 8.611).  Hard to comprehend that there was no real rise in PRODUCTION (+62K, 9.467) and a huge drop in IMPORTS (-477K, 324.0).  The only way I can see them figuring on demand falling so much was if they are trying to discern between summer grade and the coming up winter grade.  We can see the difference in production without blending drop a significant 607K b/d.

DISTILLATE:  Again, not making a lot of sense to see such a big BUILD (+4.1M, 127.1)PRODUCTION (+121K, 5.101) was good, but not great.  One thing that we can pull from this is that the yield to disty is in full force and we’re not going to get as lucky as we did this week with gas supply.  The key factor once again is the wild swing in DEMAND (-543K, 3.403).  We can’t rack this up to different fuel specs and it’s tough to figure out where the move has come from.  We see a drop in IMPORTS (-63K, 87.0) and EXPORTS (UNCH, 3.336) are still the same for dists (1.2M b/d).  That leaves us worried that by the time we get some Government numbers that we do believe, we’re going to have scratched all the hair off our head.

EIA Review 9.4.14

CRUDE: Boom.  I’m not sure how I could have pegged this DRAW (-900K, 359.6) any closer this week.  Granted  don’t have the staff of supercomputers at my competitors, I will take the Pepsi Challenge any week of the year.  There is about to be a great battle with Bulls and Bears here.  The Bears will be quick to point out that RUNS/UTIZ (-114, 16.428; -0.2, 93.2) has a long way to go with maintenance ahead.  What ever CUSHING (-400K, 20.3) is falling right now, is as much as we’re going to see it filling up as refineries come down.  Tough timing for Seaway Twin to be coming up in the next month or so, but it won’t be dry.  The Bulls (me included) think that at worst, a drop in runs is going to lead directly to a drop in IMPORTS (+42K, 7.675).  When given a choice slow DOMESTIC PRODUCTION (-1K, 8.630), or back out foreign crude, I think that US companies know where the best interest lies.  Nobody here is going to start thinking about tax inversions as long as we keep America working.

GASOLINE: So I didn’t hit the number, but I was on the right side of the DRAW (-2.3M, 210.0).  Looks like all of those refinery issues are catching up, but even more interesting was the peak in DEMAND (+380K, 9.480).  Do not skip over that as a late season anomaly.  Everyone always acts surprised when demand runs into October and it happens every year.  PRODUCTION (-431K, 9.435) is falling hard, but that’s because we’re already seeing refiners move to winter grade and out of the blending of summer grade.  The problem is that it’s just not enough and we’re going to have to see an increase in IMPORTS (-353K, 801.0).  A lot more.  This week coming in above 800K marks one of the highest this year and it’s still falling short of what we needed.  There is a risk that we can see gasoline inventories drop under 200M for the first time since the last week of October 2012.

DISTILLATE: Yeah, my ego and faith in the Bozo-puter let me miss this BUILD (+600K, 123.4).  I think right where I missed this move was on those PRODUCTION (+133K, 5.080) numbers.  That was a big move, coming in above 5M b/d, but also taking the lion’s share of refinery yield.  We know that refineries have made the shift, but with refineries coming off for turnarounds, it’s going to hurt these stocks quite a bit.  That’s not a good sign as long as DEMAND (+301K, 3.947) stays strong and considering the stable economic numbers we’re seeing in the US, along with the rate cut and QE in Europe, demand is not going anywhere but up.  So if anything, we’re not going to be able to rely on IMPORTS (+76K, 153.0) and we’re going to really be wanting to keep our EXPORTS (UNCH, 3.336; Dist 1.2M b/dmoving over to the EU.

 

EIA Review

CRUDE:  Hey, close enough for Government work right?  We were right there on the DRAW (-2.1M, 360.5) last week and there was not much affect from all of the refinery issue hype.  Fact of the matter we saw RUNS/UTIZ (+124K, 16.542; +0.1%, 93.5) rise and come in at some of the highest numbers of the year.  Now if you have been listening closely you can smell the problem burning here.  We will go into refinery maintenance soon (CUSHING +500K, 20.7) and we will see demand stay steady.  That means production is going to get squeezed here and that’s not going to look good at the pump or for holiday commercial delivery fuels.  We may have to start to rely on foreign products to make up the difference, which may be coming at a good time as we back out more IMPORTS (+174k, 7.633).  We’re doing just fine keeping our refineries running on our DOMESTIC PRODUCTION (+54K, 8.631).  Take a look at that folks and forget about the S&P over 2K.  We’re making nearly more than a million barrels more than we’re importing.

GASOLINE:  And there you go.  We caught on to the DRAW (-1.0M, 212.3) and we did expect more.  One thing you have to respect is the job of balancing PRODUCTION (+219K, 9.866) and our DEMAND (+325K, 9.100).  What might have seemed a simple task last week was actually a lot deeper than these numbers.  We already know that we’ve kept IMPORTS (-294K, 448.0) away and last week’s high number was more the outlier than the norm this year.  We’re going to see that change during turnarounds, but the real trick was seeing the EXPORTS (-176K, 3.336) drop.  We saw 125K of that come right from the gasoline exports to drop that number to only 362K last week.

DISTILLATE:  A sharp reminder that you can’t always have it all.  I whiffed on this BUILD (1.3M, 122.8) and was lost in all of the buzz last week up in NYH.  The DEMAND (-357K, 3.645) was a lot lower than I expected and that was the first and last nail in my coffin.  PRODUCTION (+34K, 4.917) is settling in and we have a good feeling that this isn’t going to change, if not rise into the end of the year.  We’re going to have to lean on IMPORTS (-65K, 77.0) as we head on through maintenance, but it remains to be seen.

EIA Review 8.19.14

CRUDE: Well I thought that we could see a big DRAW (-4.5, 362.5), but this isn’t just how I pictured it.  The IMPORTS (-387K, -7.459) backed off, but it was’t in PADD3 and it seems that the LOOP closure didn’t have all that much of an impact, at least last week.  We also saw a much higher number in crude RUNS/UTIZ (+204K, 16.418; +1.8%, 93.4) than I expected and it’s the 8th week in a row with the number over 16M b/d and gives us an 8 week average for utilization at 92.6%.  I think regardless of what I was right or wrong on, this is some solid crude demand.  If there’s any talk of oversupply it’s not because we’re not holding our own, we’re on record high demand here.  We are also seeing more crude from DOMESTIC PRODUCTION (+21K, 8.577), albeit this week was all Alaska.  We should be paying attention to CUSHING (+1.8, 20.2), but with Coffeyville down and some other issues in the past few weeks, it seems like this week caught us back up.

GASOLINE: Can’t we just use the API number?  This week’s BUILD (+600K, 213.3) pretty much just burst my bubble, but as usual, pretty skeptical.  Hard to think that with PRODUCTION (-413K, 9.647) at it’s lowest since April this year that we’re managing to build.  The DEMAND (-147K, 8.775) numbers have slipped and that’s strange considering that we’re heading right into the Labor Day holiday in two weeks.  Of course we had to adjust the demand number with the increase this week due to the rise in IMPORTS (+271K, 741.0).  That’s also a high we haven’t seen in a while (June 13th).

DISTILLATE:  We’ll take half credit for the half of this DRAW (-1.0M, 121.5).  Now this is just as confusing as the gasoline numbers because we managed to run PRODUCTION (+190K, 4.913) fairly high and close to our magical 5M b/d.  DEMAND (-28K, 4.002) is a bit surprising because we haven’t seen disty demand over 4M b/d for three weeks in a row since November 2011.  This could be a turning point for the dist demand and also a better signal that the US economy is getting back on track.  We’re going to get stingy on EXPORTS (UNCH, 3.512) and try to figure out is we can lean on IMPORTS (-9K, 142.0)f