Propane Stocks Show a Big Build in Inventories
September 3, 2020
The propane inventory report showed a big build to inventories of 4.389 million barrels putting total stock at 95.222 million barrels. Current total stock levels are 2.366 million more than last year. Midwest stocks were up 598,000 barrels putting total stocks at 25.854 million barrels 877,000 less than last year. Gulf Coast stocks were up 4.319 million barrels putting total stocks at 56.605 million barrels 2.638 million more than last year. The big build in stocks in the Gulf was very likely impacted by the two hurricanes that came through and shut down exports. This will be something to watch in the next couple weeks as it is likely exports will ramp up once they are able.
Crude stocks were down 9.362 million barrels putting total stocks at 498.401 million barrels 75.421 million more than last year. Gasoline stocks were down 4.320 million barrels putting total stocks at 234.851 million barrels , 5.273 million more than last year. Distillate stocks were down 1.675 million barrels putting total stocks at 177.520 million barrels 43.998 million more than last year. This was a bullish report as draw were across the board, but the market has traded lower. At this point I would estimate that with the large overhang of total stocks and no real news to pump up the outlook for fuel demand traders have decided to take some profits. Now the market will try to determine if this is a near term correction in an uptrend or that start of a larger move to the downside.
Prices were also helped lower by an EIA report that total U.S. gasoline implied demand fell by 374,000 bpd down to just 8.786 million bpd, which is well below the 10-year minimum for this time of year.
ADP reported that private payrolls rose by only 428,000 in August versus an expected 900,000 new jobs. The BLS reports the official data this Friday morning, but this is bearish news.