US Crude Inventories Stand 13% Below Five-Year Average
March 28, 2022
Crude oil and refined fuel product price rose on Friday, except for the nearby ULSD contract. On Friday morning prices were down with the European Union holding off on banning Russian energy imports with Germany opposed, as they rely on Russian energy for a large part of their needs. Prices did rally later in the day when news of a missile attack on an oil facility in Saudi Arabia hit the wires. Prices were up about 12% last week and after that rebound and a test into resistance the market is correcting lower again to start this week.
Baker Hughes reported that 7 crude oil rigs came online last week putting the total number of crude oil rigs at 531 rigs. US oil rigs have risen by 359 rigs since 8/21/2020 but are still 152 rigs lower than 3/20/2020 when COVID and OPEC price war started.
US crude inventories are at 13% below the five-year average for this time of year. Gasoline inventories are at the five-year average for this time of year. Distillate inventories are 17% below the five-year average for this time of year. Propane inventories are 25% below the five-year average for this time of year.
China has locked down its major financial hub in Shanghai because of a COVID-19 outbreak. The market is worried that this could lead to a demand decline of potentially 800,000 BPD.
Russia and Ukraine are also still trying to engage in talks to end the war. This puts a little selling pressure on prices.
The US is considering another release of oil from reserve and this has pressure on price as well.
The headlines continue to move the market with Russia and Ukraine news the biggest drivers.