US crude oil production continues to be strong
November 27, 2023
Baker Hughes Rig Count had oil rigs unchanged at total rigs of 500.
On Wednesday of last week, we got the weekly EIA inventory update. It called crude oil inventories up 8.7 million barrels. This report along with the news that OPEC was postponing their meeting a few days sold crude oil off over $3 dollars, but it did recover as the day wore on and settled down less than a dollar.
Total crude oil inventories are at 448.054 and last year there were 431.665, a 16.389 surplus over last year.
Gasoline inventories were up 750,000 barrel putting total inventories at 216.420 and last year there were 210.998, a 5.422 surplus year over year.
Distillate inventories were down 1.02 million putting total inventories 105.561 and last year there were 109.101, a 3.540 million barrel deficit year over year.
Propane inventories were down 470,000 barrels putting total inventories at 99.272 million, and last year there were 89.029, a 10.243 million barrel surplus year over year. Propane inventories are ample, and the weather forecast is still not very favorable for extended cold.
Midwest inventories were down 373,000 putting total inventories at 26.574 million and last year there were 25.652, a 922,000 barrel surplus year over year.
Gulf Coast inventories were down 621,000 barrels putting total Gulf Coast stocks at 55.450 million and last year there were 48.931 million a 6.519 million barrel surplus year over year.
US crude oil production continues to be strong at 13.20 million bpd. That is over 1.1 million barrel per day higher than last year at this time. US producers continue to figure out ways to become more efficient and this is a challenge for OPEC+ and the reason some market participants see OPEC+ standing steady on their current production cuts. If they do not continue to limit production the outlook would change, and the market would be looking for a surplus year over year sooner in 2024 than currently forecast or there could still be a surplus in Q1 2024, and it might just be bigger.
Saudi Arabia was still working to convince other members of the group to adhere to their current quotas or even cut and that there was not agreement, this was one of the reasons for the meeting being pushed back to later this week. Saudi Arabia was trying to persuade Kazakhstan, Kuwait, Russia, and the UAE to join in addition oil output cuts.