U.S. Delays Some Tariffs to Show Trade Goodwill to China
September 12th, 2019
Propane inventory only build by 744,000 barrels in yesterday’s weekly update. This was a bit of a surprises as the expectation was for a build over 2 million barrels. The Midwest stocks built 239,000 barrels and the Gulf Coast stocks build 509,000 barrels. Export were down 73,000 barrel per day for a total of 861,000 bpd. Production was down slight but still near 2.1 million bpd. It appears that demand was up as both wholesalers and retailers begin to get gallons purchased and customers filled up as grain drying and winter approach.
DOE inventory report said the crude oil stocks were down 6.91 million barrels putting total stocks at 416.068 million barrels. That is 19.874 million more barrels than last year at this time, but the lowest level in about a year.
Crude oil production held steady at 12.54 million barrels per day. That is still strong production despite all the negative news about shale drillers.
Stocks of crude oil at Cushing, Oklahoma were down 798,000 barrels putting total stocks at 39.328 million barrels which is 15.745 million more barrels than last year at this time.
Gasoline stocks were down 682,000 barrels putting total stocks at 228.904 million barrels which is 6.965 million barrels less than last year at this time.
Distillate stocks were up 2.7 million barrel which was bigger than expected. This put total stocks at 136.226 million barrels which is 3.057 million less barrels than last year at this time.
President Trump has delayed the start of some tariffs by two weeks as a good will offering in the negotiations with China. This news had the market selling off over night and early this morning. This market continues to be moved by headlines which have created a lot of volatility with in a range. Since early August crude oil has basically been in a $5 dollar range from $60 to $55 and ULSD has been in a $0.18 cent range from $1.95 to $1.77. Those two products are currently about in the middle of those ranges correcting off the recent highs. Until there is some breakthrough or clear direction on some of these issues the market could be in this pattern for a while.
OPEC cut its forecast for growth in world oil demand in 2020 due to an economic slowdown. It said world oil demand would expand by 1.08 million bpd, 60,000 bpd less than it previously estimated and indicated the market would be in surplus. OPEC lower its forecast for world economic growth in 2020 to 3.1% from 3.2% and said next year’s increase in oil demand would be outpaced by “strong growth” in supply from non-OPEC producers such as the United States. OPEC said its output increased in August by 136,000 bpd to 29.74 million bpd. The first increase this year.
According to official, the OPEC and non-OPEC Joint Ministerial Monitoring Committee is not planning to discuss any deeper oil output cuts nor any other adjustments when it meets today.