EIA WPSR Summary for week ending 5-24-24
School's Out
EIA WPSR Summary for week ending 5-24-24
Neural report, skewing bearish.
Summary
Neutral report.
Crude: -4.2 MMB
SPR: +0.5 MMB
Cushing: -1.7 MMB
Gasoline: +2.0 MMB
Distillate: +2.5 MMB
Jet: +0.2 MMB
Ethanol: -1.0 MMB
Propane: +2.1 MMB
Other Oil: +11.6 MMB
Total: +12.7 MMB
Spot WTI is currently pricing $77. Price is at fair value based on a price model derived from reported EIA inventories.
Crude
US Crude oil supply drew by 4.2 MMB. Crude inventories are currently 4% below the seasonal average.
0.5 MMB were added to the SPR. 14.1 MMB have been added to the SPR in 2024. Even with this addition, SPR inventories are still below January 2023 level.
US crude imports were up slightly.
Crude exports fell.
Unaccounted for crude fell but was still positive at 436 kbd. Imports and exports appear accurate this week according to independent ship trackers, so the source of this volume is unknown.
Cushing
Crude storage in Cushing, OK, drew by 1.7 MMB week on week. This is a considerable, unexpected draw.
Gasoline
Total motor gasoline inventories increased by 2 MMB and are about 1% below the seasonal 5-year average. This is normal seasonal behavior, although a week earlier than expected.
Distillate
Distillate fuel inventories increased by 2.5 MMB last week and are about 6% below the seasonal 5-year average. This is also seasonally normal behavior.
Jet
Kerosene type jet fuels built slightly.
Global miles flown are just below all-time records.
https://www.airportia.com/flights-monitor/
Ethanol
Ethanol inventories decreased 1.0 MMB week-on-week. Inventories are about 5% above seasonal averages.
Propane
Propane/propylene inventories increased by 2.1 MMB. Inventories are above the seasonal average.
Other Oil
Other oil built a massive 11.6.MMB. This is the largest build on record. There’s no clear underlying reason. With the odd behavior recently in “other oil supplied,” this could easily be an artifact from the EIA modelling issues.
Total Commercial Inventory
Total commercial inventory built by 12.7 MMB, mostly from other oil.
Natural Gas
Natural gas inventories remain high.
Refiners
US refiners processed a seasonal amount of crude last week. US refiners have not exceeded 17 MMB of crude oil processed since September, 2019.
The EIA’s product demand proxy fell slightly.
Transportation inventories built seasonally.
Simple crack spreads are really struggling currently.
The WTI term structure remains backwarded.
The 1-2 brent timespread is flat. Industry rumors suggest a large international producer is hedging their prompt production, putting additional pressure on the front month. This doesn’t suggestion strong international demand.
Discussion
The crude draw this week was a surprise. US refiners processed record amounts of crude oil, but consumer product demand proxies didn’t keep up. The product build offset any positive sentiment. Crack spreads sold off in response.
OPEC meets virtually next week. Consensus is for an extension of the production cuts. Volatility is expected.
The long Memorial Day holiday weekend marks the unofficial start of summer. Consumer demand now needs to increase for the bullish thesis to continue.
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.
American rock group, Alice Cooper, released the anthem “School’s Out” in 1972.