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POST DOE WRAP: NYMEX shoots higher on fourth straight weekly crude draw

HOUSTON, September 28, 2016 (PCW) -- NYMEX crude and products futures prices were higher early Wednesday after government figures showed a draw in crude stocks for the fourth straight week.

The US remains long in crude, gasoline and diesel. Refinery crude inputs fell slightly nationwide. Domestic gasoline demand remains robust and export volumes of products were good.

As of 9:56 am CST, November NYMEX WTI rose $0.27/bbl to $44.94/bbl; November gasoline improved 0.79 cpg to 137.05 cpg and October diesel increased 1.54 cpg to 143.15 cpg.

Crude inventories down

The US Energy Information Administration statistics for the week ending September 23 showed a 1.9 million barrel decrease in crude inventories to 502.7 million barrels. Supplies are at the lowest level since February. Domestic crude oil production was put at 8.497 million b/d, down 15,000 b/d for the week, and 599,000 b/d lower versus the same period last year.

Inventories still are “historically high” for this time of year, per the EIA, but the crude draw was a surprise. The previous week, crude stocks dropped 6.2 million barrels.

Imports of crude were down 474,000 b/d to 7.8 million b/d on the week. Over the past four weeks, crude imports averaged 7.8 million b/d, an increase of 6.5% compared to last year at this time.

Essentially, domestic crude production is lower, but imports are replacing the lost barrels.

Gasoline imports fall

Gasoline imports were put at 778,000 b/d, up from 569,000 b/d from the previous week. For the same period last year, the figure was 990,000 b/d.  Distillate imports were 144,000 b/d, up from 76,000 b/d last week and from 56,000 b/d the previous year (typically the US imports products to the US East Coast and exports from the US Gulf Coast).

Total product demand over the past four weeks was put at 20.0 million b/d, up 2.7% versus the same period last year.

Total gasoline inventories (including blendstocks) were up 2.0 million barrels at 227.2 million barrels (still “well above the upper limit of the average range,” per the EIA), 6.4 million barrels over last year. Demand was 9.4 million b/d over the past four weeks, up 3.6% from the same period last year.

Distillate stocks fell 1.9 million barrels to 163.1 million barrels (“above the upper limit of the average range,” per the EIA), 11.5 million barrels over last year. Distillate demand over the past four weeks was down 6.4% to 3.5 million b/d compared to the same period last year.

Propane stocks rise

Propane/propylene inventories on the week were 103.3 million barrels, up 1.5 million barrels on the week, and up 4.5 million barrels versus last year.

Total US refinery inputs averaged 16.3 million b/d, down 253,000 b/d compared with the previous week. Inputs of crude oil nationwide to refineries on a percentage basis were down 1.9% on the week, put at 90.1% of capacity. In the Gulf Coast (PADD III), inputs were down 1.8% to 90.4%.

Also, net exports of all products were put at 3.114 million b/d, down 300,000 b/bd for the week, still a bullish number. The US needs to export products to keep inventories manageable.

While gasoline demand was put at 9.4 million b/d, gasoline production came in at 9.555 million b/d. Distillate demand was 3.5 million b/d, but production was 4.709 million b/d. -- Robert Sharp

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