Review of EIA's This Week in Petroleum, October 19 2022

Here is the report.

Here is some of the stuff I track...

Click to Enlarge

From last week, the crude inventory slipped 1.7M barrels; distillates rose 124K; gasoline inventory slipped 114K. 

For the reporting period, WTI was $85.61, compared to year ago of $82.28. Up $3.33 or +4.0%.

Gasoline at the pump, however was $3.871 compared to last year's $3.332, a difference of +53.9¢ or +16.2% . Spot prices last year was $2.435, compared to this year's $2.6309 a difference of 19.59¢ or +8.0%.

When it comes to highway diesel the current period's price is $5.339, compared to last year's $3.671. A whopping difference of $1.668 or +45.4%.

It should be noted that those stocks are down significantly along the east coast, especially New England.

The Administration has ordered up another 15M barrels from SPR... to supposedly keep the lid on gasoline prices. That brings the total announced and pending sales to 230M barrels, even though the data has that size of reduction already having taken place, with 1M barrel a day having 17 more days. Clearly, I missed a memo.

Considering the normal crude inventory is 9M barrels above last year's mark, not sure what is hoped to be achieved. Gasoline inventories are down 8.5M from this time last year, which would suggest refineries are the bottleneck... and therefore the pricing issue.

But then we have exported 60.8M barrels of gasoline more than we have imported. (48M barrels since March). Last year was the reverse and then some, (57.8M imports more than exports) during the March to current.

A lot can be explained away as supporting our allies by filling the gap left from Russian Sanctions. Releasing more SPR doesn't seem to be the right choice, although we are expected to be gullible enough to swallow that rationale. 

I doubt the officials are as dumb as their constituents. I suspect the Ukrainian war and subsequent sanctions were the impetus for much of this, but I suspect the focus has shifted to a convenient cover to wrest the nation off fossil fuels, by depleting the SPR. Just my opinion. 

I had opined in an earlier column the SPR should be reduced, but I was thinking in terms of 10~15 years, NOT the current pace of 2~3 years. 

As I have previously stated, this 15M barrel dump will likely be the last for awhile. IF the republicans take the house, I would expect a massive drive to build the SPR back up, which would increase gas prices and the republicans can take the blame. 

This is politics, as practiced by both of parties.