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US DoE Crude Oil Inventories (W/W) 10-Dec: -4584K (Est -1700K; Prev -241K) - Every Petroleum Category Draws Down - Huge Total Draw Of -17.8mb - Neil's Summary

Dec. 17, 2021 5:00 PM ET
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EIA - Summary of Weekly Petroleum Data for the week ending Dec 10, 2021

US DoE Crude Oil Inventories (W/W) 10-Dec: -4584K (est -1700K; prev -241K)

- Distillate: -2852K (est 1000K; prev 2733K)

- Cushing: +1294K (prev 2373K)

- Gasoline: -719K (est 2050K; prev 3882K)

After two weeks of small draws in US crude inventories, got a bigger one (largest since September) in the week through December 10th as demand shot up as did exports. And if you factor in the -2.0mb decline in the SPR the net crude draw was a sizeable -6.5M. In addition, there were net draws in every major petroleum product category resulting in a huge net draw across the petroleum complex of -17.8mb (if SPR is included). Total inventories now at 1,809.4mb incl SPR. SPR stocks are now at the lowest since 2003.

We did see Cushing, where WTI is calculated, build for a fifth week by 1.29mb after last week's 2.37mb build and around 2mb the previous two weeks. So there is a decent amount of breathing room now from the minimum storage levels (storage has to stay at or above 20mb or there can be issues with the ability to keep lines pressurized, etc.). I also think those builds may be part of the outsized weakness in WTI (which has performed worse than Brent last few weeks).

Crude - Production remained at 11.7mbd, the highest of the year. Net imports fell by a big -1.4mb as exports shot up by just under that amount (imports were basically flat). Adjustment (basically an "equation balancer") was +210kbd one of the smallest of the year. Refining throughput moved higher for a seventh week to 89.8% from 88.9% as more refineries come out of maintenance. That remains down from 91.3% three months ago. Throughput though fell by -115kbd to 15.7670mbd.Crude inventories are -7% below the 5-year average (was -6% last week).

Products - As noted all major petroleum categories drew down led by "other" oils (blending components) . Gasoline now -6% below 5-yr avg (was -5% last week), distillates -9% (was -7%), and propane -10% below (was -11%). Continued propane builds with the milder weather good to see, and with the warmer weather expected to continue at least through the end of the month, it makes it less likely we'll have supply issues this winter.

Demand - Demand shot up to the highest of the year, well above this week in 2019. Demand increase led by a huge +1.3mbd increase in distillate demand and +926kbd in other oils but all areas saw healthy increases outside of residual fuel oils. Reminder, these are at the wholesale (not retail) level. 4-week average of total demand is up 12.6% y/y.

US implied oil demand rose by 3.354mbpd to 23.191mbpd

gasoline +509

jet fuel +386

distillate +1318

residual fuel oil -229

propane/propylene +445

other oils +926

Here's total demand which was above the same week in 2019 (even though this was a strong week in 2019).

Here are selected inventories. Total inventories remain well below last 5 years.

And here's crude inventories. Down to 2015 levels.

As always, a thank you to @staunovo for the charts and some of the text. He is a great follow on Twitter for all things commodities.

To see more content, including summaries of most major U.S. economic reports and my morning and nightly updates go to Cbus Neil's Blog Posts for more recent or Sethi Associates for the full history.

Weekly Petroleum Status Report (eia.gov)

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