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POST DOE WRAP: Futures fall despite decreased crude stocks

HOUSTON, October 4, 2017 (PCW) -- NYMEX crude and products futures prices were lower early Wednesday, despite government figures that showed a decrease in crude stocks.

As of 10:01 am CDT, November NYMEX WTI was off $0.19/bbl at $50.23/bbl; November gasoline fell 0.23 cpg to 156.32 cpg; and November diesel decreased 0.19 cpg to 175.12 cpg.

Finished gasoline and distillate inventories (diesel and heating oil) are still markedly lower than last year; gasoline seems to be rebuilding, but distillates (diesel and heating oil) look potentially problematic heading into winter.

Heating oil (essentially the same product as diesel) makes up approximately 20% of the US distillate market, with 80% going to diesel fuel.

Crude oil exports, at 1.491 million b/d, is an all-time record; domestic production is also very high.

The refining complex shows that things are getting back to normal, which also includes healthy exports.

Crude inventories fall 6 million barrels

The US Energy Information Administration statistics for the week ending September 29 showed a 6.0 million barrel decrease in commercial crude inventories to 465.0 million barrels (“near the upper half of the average range,” per the EIA).

Domestic crude oil production was put at 9.561 million b/d, up 14,000 b/d for the week, and 1.094 million b/d higher versus the same period last year.

Imports of crude were off 213,000 b/d to 7.2 million b/d on the week. Over the past four weeks, crude imports averaged 7.1 million b/d, a decrease of 10.7% compared to last year at this time.

Total gasoline imports were put at 862,000 million b/d, down from 1.041 million b/d last week; for the same period last year the figure was 1.003 million b/d. Distillate imports were 72,000 b/d, down from 84,000 b/d on the week; the figure for last year was 103,000 b/d (typically the US imports products to the US East Coast and exports from the US Gulf Coast).

Total product demand up 1.9%

Total product demand over the past four weeks was put at 20.2 million b/d, up 1.9% versus the same period last year.

Total gasoline inventories (including blendstocks) were up 1.6 million barrels to at 218.9 million barrels (“in the upper half of the average range”), 8.5 million barrels below last year. Only six weeks ago, on August 16, gasoline inventories were 1.6 million barrels below last year.

Gasoline demand was 9.5 million b/d over the past four weeks, up 1.3% from the same period last year.

Distillate stocks totaled 135.4 million barrels (in the lower half of the average range”), down 2.6 million barrels compared with last week, and 25.3 million barrels below last year. Distillate demand over the past four weeks was 4.0 million b/d, up 12.0 % compared with the same period last year.

Propane stocks fall 0.4 million barrels

Propane/propylene inventories on the week were 78.0 million barrels (“in the middle of the average range”), off 400,000 barrels on the week, but lower by 26.0 million barrels versus last year.

Total US refinery crude inputs on the week averaged 16.0 million b/d, down 145,000 b/d, 88.1% of capacity, higher by 0.5 percentage points. In PADD III (the Gulf Coast) runs were up 0.7 percentage points to 85.7%.

Also, net exports of all products were put at 2.479 million b/d, up 800,000 b/d for the week, a bulllish number. The US typically needs to export products to keep inventories manageable.

While domestic gasoline demand was put at 9.4 million b/d, total gasoline production came in at

10.170 million b/d. Distillate demand was 4.0 million b/d, but production was 4.929 million b/d.

Crude exports rise dramatically

Exports of crude oil were 1.984 million b/d, up from 1.491 million b/d last week; one year ago the figure was 440,000 b/d. -- Robert Sharp

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