Energy Update

[james03]

API

Crude -6.246mm (-3.884mm)

Cushing +30k - first build in 5 weeks

Gasoline +5.93mm

Distillates +3.55mm

DOE

Crude -5.186mm (-3.884mm)

Cushing -373k

Gasoline +5.319mm (+2.9mm exp) - biggest build since July 2022

Distillates +5.159mm (+1.9mm exp) - biggest build since May 2020

Same caveat about week-to-week changes.  However these trends have been in place for around 4 weeks since the Port Arthur Complex came back online.

US showing a liquid barrel surplus.  American oilmen, whom women can't get enough of despite their mothers warning "He's no good for you", have come through, restoring US crude production of 12.2 MM bbls. per day.  Add in the 360K bpd. being produced in the Guyana elephant field, soon to include Suriname and eventually top 1 MM bpd.

I think the SPR has been cut off, so we're good on the crude side.  Crude is being drawn down with high levels of refinery activity and the US is building back product stocks, which were really low.  But overall if you add crude plus products, the sum is positive, showing a surplus.  This is also another indication of the economic slowdown.  As I said, I believe Powell has succeeded in killing the inflation.  Next is the recession and unemployment.

Natural gas: storage normal, currently drawing from inventory, which is normal for this time of year.  US benchmark price:  $5.82.  European benchmark price: $42.80.  Europe is hosed.

[james03]

Forecast:  dropping oil prices, at least WTI.  WTI-Brent spread may widen due to the Russian oil embargo.  Something to monitor.  But Brent should still head down.

I recently paid around $2.70/gal at the pump.  Around $0.71/liter.  Oklahoma is the cheapest place for gas, but I imagine the drop is showing up in other States.