US Seeking to Replenish Strategic Petroleum Reserve
May 8, 2024
The API report put out yesterday evening called crude oil supplies up 509,000 barrels, gasoline supplies up 1.46 million barrels, and distillates supplies up 1.713 million barrels.
The average estimates for the DOE inventory report this morning are crude stocks to be down 1.066 million barrels, gasoline stocks down 1.255 million , and distillates down 1.098 million .
The estimate for propane inventories today is that they will be up 1.86 million barrels.
The US Energy Department said it is seeking to purchase up to 3.3 million barrels of oil to replenish the SPR. In a separate report, Amos Hochstein, President Joe Biden’s energy adviser, said the US has sufficient supply of oil in the SPR to address any supply concerns and is monitoring markets on how to use it. He said “We have been replenishing into the SPR for the last several months. I think we have sufficient supply in the SPR to address any kind of concern in the economy if we need it.
The EIA , in its Short Term Energy Outlook, cut its 2024 world oil demand growth forecast by 30,000 bpd to 920,000 bpd. However, it increased its oil demand growth estimate for 2025 by 70,000 bpd to 1.42 million bpd. Total world oil demand is forecast to increase to 102.84 million bpd in 2024 and to 104.26 million bpd in 2025. The EIA estimates that world oil output in 2024 will increase by 970,000 bpd, up from a previous forecast of 850,000 bpd to 102.76 million bpd and output in 2025 is forecast to increase by 1.89 million bpd, down from a previous forecast of 1.96 million bpd to 104.65 million bpd.
Crude oil was continuing to consolidate in yesterday’s trading. Early in the day it did crack that $78 dollar support level and was able to hit a lot of sell stops that sold it off all the way down to $77.55. At the end of the day crude was flat putting support at $76. If there is a ceasefire then that $76 level is the number traders will be looking to test. The market is likely to settle into a range of $76 to $80, waiting for some news.