US Fuel Inventories Remain Below 5-Year Averages
September 6, 2022
Energy markets were higher on Friday and were supported by the US Labor Department reporting a better than expected growth in US jobs for August, and a Baker Hughes report saying 9 crude oil rigs came offline for the week, the 4th weekly drop.
OPEC+ yesterday made what most are calling a symbolic and political decision to make a small production cut. The group decided to cut production by 100,000 bpd starting in October. Last month OPEC+ had increased production by 100,000 bpd to appease the Biden Administration, so this is essentially a zero-sum gain. OPEC+ only has as few members that can increase production as last month, they were 2.9 million bpd lower than their August targets. OPEC+ was also skeptical of the plan to put a cap on the price of Russia oil.
US commercial crude oil inventories (excluding those in the SPR) sit at 418.3 million barrels and are 6% below the five-year average. Total gasoline inventories are 7% below the five-year average. Distillate inventories are 23% below the five-year average. Propane inventories are 8% below the five-year average.
The energy markets have seen wild volatility in the last 2 days. As the OPEC+ decision hit on Monday when energy market here in the US were closed but once overnight trading opened prices for HO and crude especially rallied strong only to then selloff as today, we begin the start of the work week.
The market also continues to watch the Iran nuclear deal and those talks have been reported to have taken a turn for the worse.
The market is also keeping an eye on Russian and how they are cutting supplies on the Nord Stream One Pipeline, in what some say is retaliation to the Russian price cap being discussed.
The lock downs in China continue and the market worries about demand.