OPEC+ Will Raise Crude Output in July & August
June 3, 2022
The propane inventory report showed a build of 3.239 million barrels bringing total stocks to 49.572 million barrels. Last year at this time total stocks were at 48.151 million barrels. There are now 1.421 million more barrels than last year at this time. Midwest stocks were up 702,000 barrels putting total Midwest stocks at 11.686 million barrels and last year at this time there were 12.118 million barrels a 432,000 barrel deficit. Gulf Coast stocks were up 1.253 million barrels putting Gulf Coast stocks at 30.356 million barrels and last year there were 27.758 million barrels. There are now 2.598 million more barrels in the Gulf than last year at this time. Both demand and exports were down week on week helping stocks to build. There could continue to be builds going forward but the likely hood of a big move lower in propane is limited. There is still demand for propane for other uses and the late corn planting has many on board with the idea that there will be some corn drying.
The DOE inventory report called crude oil stocks down 5.07 million barrels, gasoline stocks were down 710,000 barrels and distillates stocks were down 530,000 barrels. Refinery run were down 0.60% at 92.60% of capacity.
US domestic production continues to be flat just short of 12 million bpd.
OPEC+ has decided to raise their output to 648,000 bpd for July and August which is more than the 432,000 bpd they had been doing. This will help if they can increase output, but it is not opening the taps to try and really help the current low inventory situation. They really have no incentive to produce more and try to help. The thought that OPEC might increase production by a larger amount had pulled crude off the day’s highs but after the real number came out crude moved higher.