US Shale Oil Producers Increase Output
August 10, 2023
US propane inventories built by 1.327 million barrels putting total stocks at 89.950 million barrels. Midwest inventories were up 699,00 barrels putting total Midwest inventories at 23.660 million barrels. Gulf Coast inventories were up 307,000 barrels putting total Gulf Coast inventories at 52.891 million barrels. Despite the build propane prices were supported but the rally in crude oil prices. Both production and exports of propane were up in this week’s update.
The DOE inventory update had crude oil inventories up 5.85 million barrels putting total crude stocks at 452.18 million barrels. This puts crude stocks 13.612 million barrels higher than last year at this time. Gasoline inventories were down 2.66 million barrels putting total gasoline inventories at 219.46 million barrels. The current inventories are 3.896 million less than last year at this time keeping concerns about the current supply levels if demand stays good. Distillates were down 1.71 million barrels putting total distillate inventories at 113.37 million barrels. Distillates are now 3.957 more than last year at this time.
A Reuters analysis of investors forecast showed that the top US shale oil producers are increasing output by pulling more from each well but lack the levels of activity to add significant new volumes. US producers are expected to increase production higher for the rest of the year by pulling more oil and gas from each well. Their outlook is to add 850,000 bpd to production. But most analyst remain skeptical shale gains can outrun the well decline rates over the long haul without a sharp increase in drilling activity.
The EIA reported a larger than expected rise in US refinery capacity of 1.1% up to a total of 93.8%.
Gasoline and distillate inventories are well below the five year mean and closer to the 10 year minimum for this time of year, helping to support prices. Also supportive to gas was a large rise in implied demand for US gasoline.