The Decline in Crude Stocks Support Rising Prices
July 1, 2021
The DOE inventory report had crude stocks down 6.72 million barrels and stocks at Cushing, Ok were down 1.46 million barrels. Gasoline stocks were up 1.52 million barrels and distillates were down 870,000 barrels. Overall, this was seen as a supportive report to higher prices as the crude declines have just continued for weeks now. Crude oil supplies are 81.185 million barrels less than last year. Gasoline stocks are 14.949 million less than last year and distillates are 37.051 less than last year.
Propane stocks were up 1.239 million barrels putting the total stock at 57.479 million barrels. The Midwest stocks were up 926,000 barrels putting total stocks at 16.216 million barrels and last year there were 18.434 million a 2.218 million barrel deficit. The Gulf Coast stocks were up 362,000 barrels putting total stocks at 31.982 million barrels and last year there were 44.807 a 12.825 million barrel deficit.
Total US propane stocks are at the lower end of the three-year range. Midwest stocks are below the three-year average range, and Gulf Coast stocks are at the three-year average range. Supplies are still low, and the builds have not been big enough to give the market much sense of comfort. Until and unless we see some big build to help increase total stocks price are supported to higher.
The market is up strong this morning as it appears OPEC+ will only give 500,000 bpd in additional gallons to the market. This is on the low end and the market appears disappointed and pricing in tighter supplies. Also, the Iran nuclear negotiations appear to be off and Iranian crude oil barrels are not coming to the market any time soon which is also helping push prices.
The market is also heading into a long holiday weekend which means some traders are already off and more will be headed out today so that is also helping the buying as many try to get their books all squared away prior to the long weekend with no market on Monday due to the Holiday.