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POST DOE WRAP: Oil prices drop despite decline in crude stocks, production

(See graph below)

HOUSTON, June 22, 2016 (PCW) -- NYMEX crude and products futures prices were down early Wednesday despite government figures showing a decrease in crude stocks and production week on week.

The US remains very long in crude, gasoline and diesel. Refinery crude input volumes rose nationwide. Gasoline and diesel demand remains robust, but export volumes are not bullish.

As of 9:52 am CST, August NYMEX WTI fell $0.18/bbl to $48.36/bbl; July gasoline declined 0.15 cpg to 159.14 cpg and July diesel dropped 0.37 cpg to 151.30 cpg.

Crude inventories down

The US Energy Information Administration statistics for the week ending June 17 showed a 0.9 million barrel decrease in crude inventories to 530.6 million barrels. Domestic crude oil production was put at 8.677 million b/d, down 39,000 b/d for the week, and 927,000 b/d lower versus the same period last year.

This is the 17th week in the past 19 that crude production has fallen (still inventories are “historically high” for this time of year, per the EIA.

Imports of crude were up 817,000 b/d to 8.4 million b/d on the week. Over the past four weeks, crude imports averaged 7.9 million b/d, an increase of 13.6% compared to last year at this time.

Total product demand over the past four weeks was put at 20.2 million b/d, up 2.1% versus the same period last year.

Gasoline inventories rise

Total gasoline inventories (including blendstocks) were up 0.6 million barrels to 237.6 million barrels (still “well above the upper limit of the average range,” per the EIA). Demand was 9.7 million b/d over the past four weeks, up 3.9% from the same period last year.

Distillate stocks rose 0.2 million barrels to 152.3 million (“well above the upper limit of the average range,” per the EIA). Distillate demand over the past four weeks was down 1.6% to 3.8 million b/d compared to the same period last year.

Propane/propylene inventories on the week were up 1.2 million barrels to 79.6 million barrels, 2.4 million barrels below last year.

Refinery runs up

Total US refinery inputs averaged 16.5 million b/d. up 188,000 b/d compared with the previous week. Inputs of crude oil nationwide to refineries on a percentage basis were up 1.1% on the week, put at 91.3% of capacity. In the Gulf Coast (PADD III), inputs rose 0.8% to 91.5%.

Also, net exports of all products were put at 1.447 million b/d, up 144,000 b/d for the week, a fairly bearish number. The US needs to export products to keep inventories manageable.

While gasoline demand was put at 9.7 million b/d, gasoline production came in at 10.289 million b/d. Distillate demand was 3.8 million b/d, but production was 4.956 million b/d. -- Robert Sharp

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