Crude Oil Storage is Running Low
April 29th, 2020
The API inventory report put out yesterday did show big builds in crude and distillates but a surprise draw in gasoline stocks which led some to believe that maybe gasoline demand may be coming back after the lock downs. The report called crude oil stocks up 10 million barrels and this compares with an estimate for today’s DOE report of a build of 10.6 million barrels. The crude stocks at Cushing, Oklahoma were up 2.5 million barrels. Gasoline stocks in the API report were down 1.1 million barrels and the estimated for today are for stocks to be up 2.5 million barrels. Distillates in the API were up 5.5 million barrels and that compares with today’s outlook to be a build of 3.6 million barrels.
Crude oil has grabbed most of the news headlines about storage being full as a result of the contract trading negative for the first time ever when it went to a negative 40 dollars per barrel. But product stocks are also getting full as there are reports of tank cars being filled up with products as tank car rates have increased in value in the recent weeks. It is estimated that the amount of crude and oil products stored at sea has jumped by about 50m barrels since last week, with an increasing volume going into smaller vessels.
The number of US coronavirus cases topped 1 million for the first time , with deaths rising to more than 58,000.
From Bloomberg, this morning we get the advance reading of first-quarter growth, with the median estimates from economist surveyed by Bloomberg forecasting a 3.8% annualized decline. That number pales into insignificance when it comes to forecast for the second quarter, where the worst estimate is for 65% pace of contraction.
Propane stocks are estimated to build by 700,000 barrels today in the propane inventory update as report indicate that exports are still strong.
S&P Global Platts Analytics reported Monday that it estimates only around 10 million barrels of crude storage remains unfilled as of the week ending April 17th. Platts estimates that storage at Cushing will be full in the next two to three weeks at current rates of storage injection.
This chart from the EIA shows that production just surpassed consumption on an annualized basis for the first time since 1957.