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POST DOE WRAP: NYMEX crude, products higher on inventory decline

HOUSTON, September 8, 2016 (PCW) -- NYMEX crude and products futures prices were sharply higher early Thursday after government figures showed a draw in crude and gasoline stocks.

The US remains long in crude, gasoline, and diesel. Refinery crude input volumes rose nationwide.

Domestic gasoline demand remains robust, and export volumes of products were down. The decline in crude was related to bad weather in the Gulf Coast that inhibited shipping.

As of 10:23 am CST, October NYMEX WTI rose $1.76/bbl to $47.26/bbl; October gasoline climbed 6.50 cpg to 141.14 cpg, and October diesel gained 4.62 cpg to 147.27 cpg.

Crude inventories drop

The US Energy Information Administration statistics for the week ending September 2 showed a 14.5 million barrel decrease in crude inventories to 511.4 million barrels. It was the lowest level since February 19, 2016. Domestic crude oil production was put at 8.458 million b/d, down 30,000 for the week, and 677,000 lower versus the same period last year.

Inventories still are “historically high” for this time of year, per the EIA.

Imports of crude were down 1.8 million b/d to 7.1 million b/d on the week. Over the past four weeks, crude imports averaged 8.2 million b/d, an increase of 7.4% compared with last year at this time.

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

Gasoline imports drop

Gasoline imports were put 607,000 b/d, down from 832,000 from the previous week; for the same period last year the figure was 589,000. Distillate imports were108,000 b/d, down from 128,000 last week and from 130,000 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 20.7 million b/d, up 2.4% versus the same period last year.

Total gasoline inventories (including blendstocks) were down 4.2 million barrels at 227.8 million (still “well above the upper limit of the average range,” per the EIA), 13.2 million over last year. Demand was 9.6 million b/d over the past four weeks, up 3.2% from the same period last year.

Distillate stocks rose 3.4 million barrels to 158.1 million (“above the upper limit of the average range,” per the EIA), 7.2 million over last year. Distillate demand over the past four weeks fell 0.1% to 3.7 million b/d compared to the same period last year.

Propane stocks climb

Propane/propylene inventories on the week were 99.1 million barrels, up 0.6 million on the week, and up 2.6 million versus last year.

Total US refinery inputs averaged 16.9 million b/d, up 315,000 b/d compared with the previous week. Inputs of crude oil nationwide to refineries on a percentage basis were up 0.9% on the week, put at 93.7% of capacity. In the Gulf Coast (PADD III), inputs were up 0.4% to 93.1%.

Also, net exports of all products were put at 1.531 million b/d, down 628,000 for the week, a fairly bearish number. The US needs to export products to keep inventories manageable.

While gasoline demand was put at 9.6 million b/d, gasoline production came in at 10.173 million b/d. Distillate demand was 3.7 million b/d, but production was 5.031 million. -- Robert Sharp

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