U.S. and Iran in Negotiations
February 19, 2021
The DOE inventory report called crude oil stock down 7.26 million barrels putting total stocks at 461.76 which is 18.874 million more barrels than last year at this time and 22.466 million more than the three-year average. Cushing crude stocks were down 3.028 million barrels putting crude stocks at Cushing, Ok at 45.016 million barrels which is 6.773 more than last year at this time and 7.260 million more than the three-year average. Gasoline stocks were up 670,000 barrels putting total stocks at 257.084 million barrels which is 1.994 million less than last year at this time and 1.998 million more than the three-year average. Distillate stocks were down 3.42 million barrels putting total stocks at 157.684 million barrels which is 17.097 million more barrels than last year at this time and 18.279 million more than the three-year average. Crude stocks are down 32 million barrels since the beginning of the year.
The propane inventory report had stocks down 2.896 million barrels putting total stocks at 48.649 million barrels which is 20.077 million less than last year at this time and 5.573 less than the five-year average. Midwest stocks were down 1.070 million putting total Midwest stocks at 13.351 million barrels which is 586,000 less than last year and 622,000 more than the five-year average.
Bloomberg reported that Iraq oil exports rose in the first half of February even though they pledged to reduce oil output this month. This could cause Saudi Arabia to raise their output soon. The current outlook is that for sure in April Saudi Arabia will raise output but news like this about Iraq could make it sooner.
Despite the cold temperatures and the refinery upsets it now appears that imports may make up the supply concerns faster than refineries come back, and this news has calmed the market a bit here early. But the impact of the weather will be seen in the inventory reports over the next few weeks. I have seen reports that the decline in production was the largest in history with some estimates at 4 million bpd.
Iran has said they will immediately reverse actions in its nuclear program when US sanction are lifted. If the US and Iran can agree then it could mean more of Iran’s oil coming to market and if that does happen it will put more questions into the OPEC+ situation and what they might do.
History caused by the extreme cold that blanket most of the US. Some estimated the decline at roughly 4 million bpd.