US Crude Production Set a New High
August 29th, 2019
The inventory report put out by the DOE said that crude stock were down 10.03 million barrels confirming the big draw in the API report. Cushing, Ok also showed another draw of 1.98 million barrels. This draw at Cushing was also the eight week in a row with a draw. This was all the market needed to fuel some more buying and prices rallied on the release of the inventory numbers. Gasoline stocks were down 2.09 million barrels and distillate stock were down 2.06 million barrels. The draws across the board had traders buying up the market and pushing prices higher.
Total crude stocks now sit at 427.75 million barrels which is still 21.959 million more barrels that last year at this time. That big of an excess despite roughly a 1.25 million barrel decline in stocks over the last two weeks.
Gasoline total stocks sit at 231.982 million barrels 792,000 barrels behind last year at this time. Total distillate supplies are at 136.060 million barrels 6.059 million more barrels than last year at this time.
US crude oil production set a new high at 12.5 million bpd.
Propane inventory were reported up 3.661 million barrels putting total stocks at 94.157 million barrels. Propane supplies have built almost 11 million barrels over the last three weeks. And as has been said at this point this trend should continue over the medium term.
The Midwest stocks build by 644,000 barrels putting total stocks at 26.135 million barrels 1.675 million more barrels than last year at this time. Gulf Coast stocks build by 2.908 million barrels putting total stocks at 56.467 million barrels 19.837 million more barrels than last year as this time. The only thing that helped propane trade higher today was the bigger than expected draw in crude oil. Propane fundamentals are bearish but without falling crude oil and or the stock market propane is likely to hold its ground as selling seems to get light after propane test into the low 30 cents levels at Conway.
Reports today said that President Trump would be announcing plans to boost the demand for biofuels. Secretary of Agriculture Sonny Perdue made this announcement but had no details on when or how this was program would work our when it would start.
Hurricane Dorian currently looks to be a category 3 storm and is expected to make landfall over eastern Florida sometime over the weekend. The path of these storms is very hard to predict and I am seeing comments from form both sides, one side says the impact to energy is limited, the other side saying that some oil platforms will be getting shut down and it could possible impact all production in the Gulf of Mexico. We will just have to stayed tune to see where this storm tracks.
The US Commerce Department revised the second quarter GDP to 2.0% after their initial reading of 2.1%.
According to AAA, this year has the lowest average nationwide gasoline prices for Labor Day weekend in three years.
News that could potentially limit the current upside in crude oil came out in a new report stating that Russia is producing above its allowed quota under its current agreement with OPEC + group. The report says the Russia’s oil production increased to 11.31 million bpd in August, up from 11.15 in July with their quota at 11.17 million bpd.