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POST DOE WRAP: NYMEX goes higher on crude and product exports

HOUSTON, November 1, 2017 (PCW) -- NYMEX crude and products futures prices were higher early Wednesday after government figures showed a decrease in crude stocks and products.

Despite high crude oil production (near record levels), and lower refinery inputs, domestic commercial crude stocks are at their lowest level since January of 2016.

“The only explanation is (crude oil) exports,” said one source.

Exports of crude oil were 2.133 million b/d, up from 1.924 million last week; one year ago the figure was 404,000.

As of 10:17 am CDT, December NYMEX WTI was up $0.25/bbl at $54.63/bbl; December gasoline rose 2.52 cpg to 175.77 cpg; and December diesel increased 0.27 cpg to 188.32 cpg.

Finished gasoline and distillate inventories (diesel and heating oil) showed drawdowns; gasoline and distillate exports are very high.

Heating oil (essentially the same product as diesel) is approximated 20% of the US distillate market, with 80% going to diesel fuel. It looks tight, with inventories well below last year.

Crude inventories fall 2.4 million barrels

The US Energy Information Administration statistics for the week ending October 27 showed a 2.4 million barrel decrease in commercial crude inventories to 454.9 million barrels (“in the upper limit of the average range,” per the EIA).

Domestic crude oil production was put at 9.553 million b/d, up 46,000 for the week, and 1.031 million higher than the same period last year.

Imports of crude were off 552,000 b/d to 7.6 million on the week. Over the past four weeks, crude imports averaged 7.7 million b/d, essentially unchanged compared with last year at this time.

Total gasoline imports were put at 540,000 b/d, down from 233,000 last week; for the same period last year the figure was 448,000. Distillate imports were 137,000 b/d, up from 133,000 on the week; the figure for last year was 60,000 b/d (typically the US imports products to the US East Coast and exports from the US Gulf Coast).

Total product demand falls 3.4%

Total product demand over the past four weeks was put at 19.5 million b/d, down 3.4% versus the same period last year.

Total gasoline inventories (including blendstocks) were off 4.0 million barrels to at 212.8 million (“in the middle of the average range”), 11.0 million below last year. Gasoline demand was 9.3 million b/d over the past four weeks, up 2.8% from the same period last year.

Distillate stocks totaled 128.9 million barrels (in the lower half of the average range”), down 0.3 million, compared with last week, and 21.6 million below last year. Distillate demand over the past four weeks was 3.7 million b/d, down 9.3% compared with the same period last year.

Propane stocks rise 0.7 million

Propane/propylene inventories on the week were 78.3 million barrels (“in the lower half of the average range”), up 0.7 million on the week, but lower by 22.6 million versus last year.

Total US refinery crude inputs on the week averaged 16.0 million b/d, lower by 10,000, 88.1% of capacity, higher by 0.4% percentage points. In PADD 3 (the Gulf Coast) runs were up 0.2 percentage points to 90.4%.

Also, net exports of all products were put at 3.487 million b/d, down 0.656 for the week, still a very bulllish number. The US typically needs to export products to keep inventories manageable.

While domestic gasoline demand was put at 9.3 million b/d, total gasoline production came in at 10.187 million. Distillate demand was 3.7 million b/d, but production was 5.036 million. -- Robert Sharp

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