Ukrainian and Iranian Issues Cloud Market
February 17, 2022
The DOE inventory report called crude oil stocks up 1.121 million barrels putting total stocks at 411.508 million barrels and last year they were 461.757 million a 50.249 million barrel difference. Crude stocks at Cushing, Ok were down 1.9 million barrels putting total Cushing crude stock at 25.827 million barrels and last year there were 45.016 million barrels a 19.189 million barrel difference.
Gasoline stocks were down 1.332 million barrels putting total stocks a 247.061 million and last year there were 257.084 a 10.023 million barrel deficit. Distillate stocks were down 1.552 putting total stock levels at 120.262. Last year at this time there were 157.684 a 37.422 million barrel defecit. Stocks are still on the lower end and are a concern going forward. US shale production and OPEC+ production are factors, as well as demand on how stocks build or draw going forward.
Propane inventories were down much bigger than expected with a draw of 5.935 million barrels putting total stocks at 41.903 million and last year there were 48.649 a 6.746 million barrel difference. Midwest stocks were down 1.851 million barrels putting total Midwest stocks at 12.918 million barrels and last year there were 11.735 a positive 1.183. Gulf Coast stocks were down 2.489 million barrels putting total Gulf Coast stocks at 21.005 and last year they were 28.358 a 7.353 million barrel deficit.
There is still a lot of uncertainty around Russian aggression against Ukraine. Russia claims it is actively withdrawing troops, yet there is no evidence to support this claim. This continues to be an ongoing concern. The other news from yesterday that sent the market lower was more optimism about the Iran nuclear deal. This situation is much like the Russia and Ukraine situation as the news appears good and makes a great headline but getting down into the details doesn’t look as optimistic. These two events will remain big drivers of market prices. But despite what appears as a less positive outlook than the headlines portray the bulls continue to take profits pushing the market down. I think the bulls have just grown tired and are taking profits as the last few days have likely put some concerns into the bullish outlook.
Demand is still showing as good despite high prices. Gasoline demand was down 423,000 BPD but still strong at 9.009 million BPD. Distillate demand was also down 158,000 BPD but good at 5.114 million BPD.
The AAA reported that the average retail price of gasoline increased to its highest level since July
2014 on Tuesday to $3.514/gallon, up 16 cents from Monday. Nationwide diesel prices also increased
by 16 cents to $3.921/gallon, the highest level since July 2014 as well.