OPEC+ Focused on Maintaining Crude Cutbacks
November 13, 2020
Propane stocks were down 939,000 barrels putting total stocks at 94.889 million barrels compared to last year when there were 92.915 so a positive 1.974 million more barrels than last year. Production was up 22,000 barrels per day at a still solid 2.226 million bpd. Exports were down 232,000 bpd to a still very respectable 1.193 million bpd. Midwest stocks were up 305,000 barrels to a total of 26.174 million barrels and last year there were 24.825 million barrel a plus 1.349 million barrels more. Gulf Coast stocks were down 2.033 million barrels putting total stocks at 54.112 million barrels and last year at this time there was 55.951 a minus 1.839 million less than last year.
DOE inventory report called crude oil stocks up 4.28 million barrels this is much more than the expectations and way different than the API number. Total US stocks are at 488.706 million barrels which is 39.705 million more barrels than last year. Cushing, Ok crude stocks were down 518,000 barrels with total stocks at 49.540 million barrels which is 1.595 million less than last year.
Gasoline stocks were down 2.309 million barrels and total stocks are at 225.356 million barrels which is 6.266 million more than last year.
Distillate stocks were down 5.355 million barrels putting total stocks at 149.289 million barrels still 32.634 million more barrels than last year at this time.
Wells Fargo noted in a research note that while an increasing number of US shale operators are now seeing $30.00 per barrel price level as a breakeven price, most are noting a need for prices to maintain a $45-$50 per barrel level to activate significant production growth, but most do not expect price to maintain this pricing level until 2022 and beyond.
According to several delegates, talks between OPEC and its allies are focusing on a delay to next year’s planned output increase of three to six months. Saudi Arabia and Russia have already indicated that they are reconsidering easing production cuts in January as the resurgent pandemic hits fuel demand. OPEC and its allies are increasingly focused on maintaining the current cutbacks into early 2021.
The International Energy Agency said global oil demand is unlikely to get a significant boost from the roll-out of vaccines against COVID-19 until well into 2021. A view that is likely to dampen oil price gains since vaccine progress was announced earlier this week. It stated that “It is far too early to know how and when vaccines will allow normal life to resume. For now, our forecasts do not anticipate a significant impact in the first half of 2021.”