Russian Crude Oil Exports Appear to be Slowing
December 21, 2022
The API inventory report called crude oil inventories down 3.1 million barrels, gasoline stocks up 4.5 million barrels and distillates down 828,000 barrels.
The average estimated for today’s DOE inventory report from the Bloomberg survey are crude down 131,000, gasoline up 1.819, and distillates up 645,000.
The estimate for today’s propane inventory update is for supplies to be down 602,000 barrels and the five-year average for this reporting week is down 3.141 million barrels.
The US dollar index fell by 0.8% yesterday helping to support energy prices higher. The cold snap we are going to encounter over the next few days has supported heating oil prices.
Bearish for price was the news that TC Energy submitted a plan to regulators to restart the Keystone Pipeline that was shut down almost 2 weeks ago and carriers 622,000 bpd from Canada to the Gulf Coast.
Barclays in a recent report update said that demand 1 to 2 million bpd below their forecast would decrease their forecasted crude oil price down $15 to $25 dollars per barrel. A weaker economy is the likely cause of this type of demand declines. They also said that China could easily make up that 1 to 2 million barrels decline if China has a full re-opening. This situation will take weeks and likely months to play out.
The head of ConocoPhillips’ Alaska operations, Erec Isaacson, signaled the company would walk away from an $8 billion oil project in the Artic if the US government forced it to further scale down drilling to just two locations, stating that it would no longer be economically viable.
Gulf refiners are entering a period of heavy turnarounds early next year. Argus estimates around 700 million bpd of crude oil distillation unit capacity is expected to go offline. These are planned outages, but their will likely be other unplanned maintenance and turnarounds in the coming months.
Russian crude oil exports appear to be slowing, according to Reuters Eikon ship tracking Russian seaborne exports are down 1.9 million barrels per day in December when compared to November.
Americans are still sitting on a record amount of cash that should provide support to spending and the economy in 2023, but economists say there is a 70% likelihood that the US economy will sink into recession next year, slashing demand forecast and trimming inflation projections in the wake of recent interest-rate hike by the Federal Reserve.