Stimulus Talks Remain Gridlocked
August 13, 2020
Crude oil stocks in the EIA inventory report were down 4.51 million barrels putting total stocks at 514.038 million barrels and last year at this time there were 440.510 million barrels 73.574 more barrels than last year. Cushing, Oklahoma, the delivery point for the NYMEX WTI crude oil futures contract, had stocks reported up 1.336 million barrels putting total stocks at 53.289 million barrels compared to last year at this time when there were 44.821 million barrels a positive 8.468 million more.
Gasoline stocks were down 720,000 barrels putting total stocks at 247.084 million barrels compared to last year at 233.760 a positive 13.324 million more barrels.
Distillate stocks were down 2.32 million barrels putting total stocks at 177.655 million barrels compare to last year at this time when there were 135.513 million barrel , 42.142 million more barrels. I know we have had draws to inventory the last few weeks and that has been talked about as supportive, but I still see these tremendous overhang of stocks and I struggle that it should be putting more downside pressure on prices. The market doesn’t see that overhang, it sees lower production and better demand and inventory going down supporting the market. Now you add in more optimism about a vaccine by year end and that keep prices rangebound at a minimum and the potential to trade higher if good news on all these fronts continues.
Propane stocks were up 2.623 million barrels putting total stocks at 89.336 million barrels and last year at this time there were 82.623 million barrels 6.713 million more than last year. Midwest propane stocks were up 1.336 million barrels putting Midwest total stocks at 24.369 million barrels compared to last year at 42.819 million a deficit of 450,000 barrels. Gulf Coast stocks were up 1.588 million barrels putting total stocks at 51.180 million barrels compared to last year at 47.716 million barrels a positive 3.464 million compared to last year.
The following is from Bloomberg I have included it as I think the stock market and energy markets to a lesser degree also are looking past the current issues and only see positives. Bloomberg: The chances of a big fiscal stimulus package seem more distant than ever today, after House Speaker Nancy Pelosi rebuffed an “overture” from Treasury Secretary Steven Mnuchin to restart talks because the White House hadn’t budged on demands for a smaller package. Mnuchin said it was Pelosi who was refusing to compromise. At least Chief White House economic adviser Larry Kudlow isn’t too worried about the impasse, saying the economy is “doing great right now” and won’t come to harm if the two sides can’t agree. That also seems to be the view of markets, with the S&P 500 Index briefly trading above its record closing level during yesterday’s session.
EIA reported that total US gasoline product supplied (implied demand) rose last week by 266,000 bpd to a total of 8.883 million bpd for the week ending August 7th.
However, US gasoline implied demand is down by 10.2% over the past 4-weeks versus last year and down by 14.5% based upon a cumulative daily average versus last year.
EIA reported that total distillate product supplied rose by 162,000 bpd up to a total of 3.862 million bpd for the 4-week ending August 7th.
US distillate demand is now down by 9.3% over the past 4-weeks versus last year and down by 10.1% based upon a cumulative daily average versus last year.