Propane Stocks Are Up Substantially YOY
August 8th, 2019
Propane stocks in the inventory report were up a big 2.852 million barrels. Propane stocks in the Midwest were up 507,000 barrels and in the Gulf Coast stocks were up 1.962 million barrels. Prices did move lower for prompt propane but the winter month values were more stubborn to go lower.
Total propane stocks are now at 83.3 million barrels, 16.923 million more barrels than last year at time. Last year the market did not get 83 million barrels until the last week of October and that was also the 2018 peak in propane inventories. From this point forward in 2018 until the end of September the end of the propane build season propane stocks built by 12.2 million barrels. If we get a similar build this year total stocks will be near 95.5 million barrels, which would be near record high levels, roughly the third highest on record. The Midwest total stocks are now at 24.560 million barrels 1.787 million more than last year at this time. Gulf total stocks are now at 49.101 million barrels which is 1.993 million more than last year at this time.
The DOE inventory report said the crude oil stocks were up 2.39 million barrels and the stocks of crude oil at Cushing, Ok were up were down 1.5 million barrels. Total stocks of crude oil now sit at 438.93 million barrels 31.541 million more barrels than last year at this time. Gasoline stocks were up 4.44 million barrels putting total stocks at 235.172 million barrels 1.304 million more than last year at this time. Distillate stocks were up 1.53 million barrel to a total stock level of 137.451, 12.028 million more barrels than last year at this time. The builds across the board was more than the market was expecting and that fact along with the negative outlook for global economy had the market selling off hard after the release of the inventory report. Prices did recovery off the lows and held key support but the bull’s better get to work fast or the downtrend will continue.
Saudi Arabia yesterday after the close of the markets said that they were going to do whatever is necessary to stabilize crude markets. They added that they will keep exports below 7 million bpd for August and September. An unnamed official said the kingdom won’t tolerate a continued slide in price and is considering all options. This news has the market working higher this morning. Also helping to support prices were good export data out of China which was an unexpected and welcome sign. China’s exports turned to growth in July on improved global demand. July exports rose 3.3% from a year ago and were at their fastest pace since March.
Most trader assume that the above comments mean another production cut. The market will just have to see if this materializes. Saudi Arabia didn’t get the expected results they hoped for when they overproduced in an effort to put US shale out of business a few years back so maybe this time they move to the other end of the spectrum.