Propane Inventories Near Bottom Range of 5-Year Average
August 3, 2022
The average estimates for today’s DOE inventory report from the Bloomberg survey are for crude to be down 798,00 barrels, gasoline down 1.014 million barrels and distillates up 740,000 barrels.
In propane, weak domestic demand has led to larger than expected inventory builds and, despite growth in domestic production, propane has managed to find a home through exports. Year-to-date propane exports are up 50 million barrel per day compared to the same period last year. As has been mentioned, propane inventories are below last year and near the bottom of the five-year average range, and any pickup in demand from crop drying or early winter demand could push prices higher.
The API inventory report called crude oil stocks up 2.16 million barrels, gasoline down 204,000 barrels and distillates down 350,000 barrels.
OPEC+ sees this year’s oil market as slightly less supplied than previously estimated. Two OPEC+ delegates said the OPEC+ Joint Technical Committee cut is forecast for a surplus in the oil market this year by 200,000 bpd to 800,000 bpd. OPEC+ is sending mixed message about output. Yesterday it was expected to keep oil output the same for September at their meeting today with only 2 of the 8 officials saying an oil output hike would be discussed. Now today reports say Saudi Arabia will push for an increase.
The Group of Seven nations is looking at blocking the transportation of Russian oil among other options to deprive Russia of revenues amid its invasion of Ukraine.
May construction spending, which was expected to be up .4% was actually down 1.1%. This is against a previous down .1%. That makes two months in a row that construction spending has fallen.
Estimates for today’s propane inventory report are for stock to build by 1.84 million barrels.
The following is from the EIA:
“In Asia and the Middle East, at least nine refinery projects are beginning operations or are scheduled to come online before the end of 2023. At their current planned capacities, they will add 2.9 million barrels per day of global refinery capacity once fully operational. In the international Energy Agency’s June 2022 Oil Market Report, the IEA expects net global refining capacity to expand by 1.0 million barrels per day in 2022 and by an additional 1.6 million barrels per day in 2023. Net capacity additions reflect total new capacity minus capacity that has closed. The global expansions follow a period of reduced global refining capacity. Net global capacity decline in 2021 for the first time in 30 years, according to the IEA.”