EIA WPSR Summary for week ending 8-1-25
Summary
Crude: -3.0 MMB
SPR: +0.2 MMB
Cushing: +0.4 MMB
Gasoline: -1.3 MMB
Distillate: -0.6 MMB
Jet: +1.0 MMB
Ethanol: -1.0 MMB
Propane: +1.3 MMB
Other Oil: +5.9 MMB
Total: +2.1 MMB
Bullish seasonal report. Strong refiner activity and healthy consumer demand.
Spot WTI is currently pricing $64 Prices remain discounted in relation to estimated fair value based on a price model derived from reported EIA inventories.
Crude
US Crude oil supply drew by 3.0 MMB. Crude inventories are currently 6% below the seasonal average, falling just below the 2022 seasonal levels.
Crude inventories haven’t bene this low seasonally since 2018.
0.2 MMB were added to the SPR.
SPR inventories hover right around the 400 MMB mark.
US crude imports were down on the week, back to average levels.
US crude exports remain below average but bounced back from previous lows.
Unaccounted for crude is still high but down on the week.
US crude production is down slightly but remains elevated. The May EIA 914 showed US production at record levels. This seems in conflict with producer field reports. Drilling is down. Frack spreads are down. Permian wells continue to get gassier. It seems the EIA is counting additional liquid as crude production. They tried to correct this error previously with the new category “transfers to crude oil supply.” But the reported number doesn’t change much weekly. How the EIA is accounting for this blending isn’t clear. It certainly seems like crude production is over-counted.
Cushing
Crude storage in Cushing, OK, built by 0.4 MMB week-on-week. Cushing inventories remain low.
Gasoline
Total motor gasoline inventories decreased by 1.3 MMB and have again fallen below seasonal averages. Inventories are about 1% below the seasonal 5-year average.
Distillate
Distillate fuel inventories decreased by 0.6 MMB last week and are about 16% below the seasonal 5-year average.
Jet
Kerosene type jet fuels built by 1.0 MMBD. Inventories are above seasonal averages. Jet fuel demand remains strong.
Ethanol
Ethanol inventories decreased 1.0 MMB week-on-week. Inventories are still high but appear to be trending back toward seasonal averages.
Propane
Propane/propylene inventories increased by 1.3 MMB. Propane inventories are above average but follow a seasonally normal trajectory.
Other Oil
Other oil but by 5.9 MMB. Other oil inventories match record seasonal high levels. It still seems like the EIA is having difficulty differentiating between other oil and gasoline blending components on a weekly basis.
Total Commercial Inventory
Total commercial inventories increase by 2.1 MMB. Inventories are below seasonal averages.
Natural Gas
Natural gas inventories are above average. Supply is high but so is demand, keeping inventories from bloating.
Refiners
US crude refiners continue to run maximally.
The moving average for EIA’s product demand proxy fell back from records but remains healthy.
Transportation inventories drew. They are below average but are elevated from 2022 and 2023 lows.
Simple cracks continue to show strength.
Discussion
This was a bullish seasonal report although spot pricing has been under pressure all week. Sentiment remains poor.
Some mainstream publications are picking up on the discrepancy between weak pricing and relatively strong physical market movement.
Most metrics indicate crude is undervalued here. A lack of supply does not dictate $100 oil. But $64 is too cheap. Production is falling, even if they EIA is not yet capturing it. Whispers are again starting of the next “commodity super-cycle.” It’s much too early to consider that. But low prices have a way of regulating commodity markets over time. These prices are not supportive enough to drive investment.
Not investment advice. Informational purposes only. No specific positioning or security recommendations are intended. Sources are cited when available but accuracy of 3rd party data cannot be guaranteed.
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