Crude and Petroleum Product Inventories - July 26 2023

Data per the EIA weekly report. 

Crude stocks fell by -600K barrels, from last week, yet remains only -0.3% from the 5 year seasonal average. It should be noted the 5 year average includes the abnormal 2020 and 2021 number. Otherwise, the current inventory is nearly +4.2% above normal.

Distillates inventory slid 245K barrels; and Gasoline inventories slid at about 800K barrels. Distillates (-13.5%,-3.2%) and Gasoline (-5.8%, -3.1%) are both below 5 year and 3 year adjusted average inventories.

The SPR halted the decline last week and remains unchanged from this report.

WTI is $78.94, compared to $75.38 (+4.8%), one week ago, and $94.65, one year ago(-16.6%).

Refinery output improved on a weekly basis, yet remains below year ago levels

For anyone interested, the U.S. has exported 771.2M barrels of crude and petroleum products, more than imported, since March 1, 2022. It jumped nearly 16.9M barrels this past week.

Overall, crude stocks remain quite healthy, compared to this time last year, with days supply at 27.8, to last year's 25.6 days.

It is 6 of one and a half dozen of the other, for the crude prices moving upward. Supposedly China's crude demand will increase, due to Government intervention, although the outcome is still in doubt. The Saudi's will reduce production starting next month, although there are reports of increased Russian exports. 

All of this was theorized in April and then prices fell. Will this be a repeat?

Natural Gas Inventory Report, July 21, 2023

The Energy Information Administration released their weekly report yesterday.

Nationally, the inventory number continue to stay above the 5 year seasonal average.

The Pacific Region continues to gain, with last week's numbers, at -7.9% vs. -9.3% of one year ago. The 5 year seasonal numbers continue to improve.

In California, the price at PG&E Citygate in Northern California rose 57 cents, up from $4.32/MMBtu last Wednesday to $4.89/MMBtu yesterday. The price at SoCal Citygate in Southern California increased $2.24 from $3.40/MMBtu last Wednesday to $5.64/MMBtu yesterday. Natural gas consumption in the electric power sector increased by 84% (1.3 Bcf/d) in California and by 10% (0.3 Bcf/d) in the desert Southwest this report week

 Select inventories of EU and UK... 

Total EU rose to 82.53%, from last week's 78.63%.

It should be noted that Gas in storage does not represent usage. An Example would be Germany has 212+ TWH in storage, but consumed approximately 847 TWH in 2022, which was a 17% decrease from 2021.

The following contains pricing information, that is based in Mmbtu and converted to US dollars for comparison purposes only. Forex is used for this comparison and should be noted that actual exchange rates on delivery may vary. 

Simply put... The EU and UK consumers do not use US Dollars, so be wary of these charts.

Snapshot of the past, the current and the future outlook for prices.

Just for comparison, the UK current pricing would suggest £1,522.06 per annum, while the 12 month high (FEB-24) would suggest £2,286.37. OFGEM has a cap around £2,047, which is line with the October futures.

Gasoline consumption per latest EIA data, July 19, 2023

Gasoline prices (per AAA) rose from last report to $3.569. One year ago the price had fallen to $4.495, and was on its downward trajectory... into the mid September lull, around  $3.67.

Consumption slipped week over week, but stands 3.8% above year ago numbers. (This is a four week moving average).

he import/export surplus of gasoline since last March 1st 2022, jumped to +103.6M barrels. It had basically remained flat for the past 3 months, until the previous week's +2.3M barrel jump, and this past week at +2.5M barrels.

The pump prices are most likely set to rise, but in the 5¢ range. This is mostly based on crack spread edging up, exports, and refinery operation rates. Take you pick.

After the ups and downs, the pattern seems to be stable in the $3.55~$3.65 range. 

Crude and Petroleum Product Inventories - July 19 2023

Data per the EIA weekly report. 

Crude stocks fell by -708K barrels, from last week, yet remains down -0.8% from the 5 year seasonal average. It should be noted the 5 year average includes the abnormal 2020 and 2021 number. Otherwise, the current inventory is nearly +3.2% above normal.

Distillates inventory edged up 13K barrels; and Gasoline inventories slid at about 1M barrels. Distillates (-13.9%,-3.5%) and Gasoline (-6.1%, -3.6%) are both below 5 year and 3 year adjusted average inventories.

The SPR halted the decline and actually increased 1K barrels. 

WTI is $75.38, compared to $75.87, one week ago, and $96.88, one year ago.

Refinery output improved on a weekly basis, yet remains below year ago levels

For anyone interested, the U.S. has exported 754M barrels of crude and petroleum products, more than imported, since March 1, 2022. It jumped nearly 9.3M barrels this past week.

Overall, crude stocks remain quite healthy, compared to this time last year, with days supply at 27.9, to last year's 25.8 days.

I have read where the talk is about crude prices jumping up and it might happen. However, how much of it is wishful thinking by crude traders? It is more satisfying to buy low and sell high... in an ever rising market.

Comparison of Inflation in selected countries- July, 2023 Edition

With the United Kingdom EUstats release of June data, I have updated my comparison graph...

Note, the USA(EU method) is directly from Eurostats.

The rate of inflation is decelerating across the board. However, the near 19%+ rise in prices, over the past 26 months is still fresh in the minds of most consumers.

There are some naysayers worried about the rapid deceleration, as sign of either a recession or possible deflation.

This seems to be based on the notion of this deceleration never happening before. Not so sure about that, as it has occurred in the past 80 years, and not always accompanied by a recession. Granted, monetary policy has been a factor, but again... such recessions were most often deemed as mild. 

But what do I know?

7-18-23, Advance Retail Sales Report for June

Advance Monthly Sales for Retail and Food Services, June 2023. 

Advance estimates of U.S. retail and food services sales for June 2023, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $689.5 billion, up 0.2 percent (±0.5 percent)* from the previous month, and up 1.5 percent (±0.7 percent) above June 2022. Total sales for the April 2023 through June 2023 period were up 1.6 percent (±0.4 percent) from the same period a year ago. The April 2023 to May 2023 percent change was revised from up 0.3 percent (±0.5 percent)* to up 0.5 percent (±0.2 percent).

Retail trade sales were up 0.2 percent (±0.5 percent)* from May 2023, and up 0.5 percent (±0.5 percent)* above last year. Nonstore retailers were up 9.4 percent (±1.6 percent) from last year, while food services and drinking places were up 8.4 percent (±2.3 percent) from June 2022.

Those figures are nominal, meaning not adjusted for inflation. Compare the nominal 0.2% monthly and 1.5% annual increase... to the CPI of 0.2% monthly and 3.0% annual. In other word, the montly was flat in inflation adjusted and -1.5% on the annual inflation adjusted.

Now for the good news... maybe.

After months of the media extolling the upward trend meeting or exceeding expectations of the Advance report, they are ho-hum to disappointed in this report.

For months, I have lamented the constant downward revisions of preceding months, which gives the appearance of meeting or exceeding expectations on the Advance Report.

However, this month's advance report shows an upward revision to both April and May... from last month. Without the upward in revision in May's numbers, the uptick would have been about +0.43%. Which is still below the expectations, but not as far below the +0.5% expected.

What does appear to be happening... is the consumer is running out of steam, and has been since January. Even the FED has picked up on this. The Census Bureau acknowledges this with their XLS download (table 2). 

Now the winners and losers...

Nonstore retailers is generally the mail order places, such as Amazon, etc. Furniture and electronics popped up as well as clothing. 

Building materials, gasoline stations, sporting goods, and surprisingly... grocery stores slid.

As stated earlier, the spending habits are simply shifting from one thing to another, with no real growth... except inflation generated.

This graph is from data taken from the St. Louis Federal Reserve (FRED) website...

Seriously, the data from every source... indicates the party is pretty much over. It will be hard to put any type of positive spin... going forward. 

Spin has been most of the business news for over a year. The realization of this condition will lead to claims of gloom and doom... which is also spin. 

The past two years have not been nirvana and the outlook going forward is not bleak. At some point the spin will moderate to reality, imho.

Natural Gas Inventory Report, July 14, 2023

The Energy Information Administration released their weekly report yesterday.

Nationally, stocks continue to be above the mid point of 5 year range. However... once again the Pacific.

While the Pacific gained this past week, it only matched the curve for time of year.

Prices increased in most West Coast markets this week, except at SoCal Citygate in Southern California, where the price decreased 45 cents from $3.85/MMBtu last Wednesday to $3.40/MMBtu yesterday. Natural gas consumption in California declined 8% (0.4 Bcf/d) week over week, led by a 26% (0.5 Bcf/d) decrease in consumption in the electric power sector, according to data from S&P Global Commodity Insights. 

Select inventories of EU and UK... 

Total percent of capacity rose this past week to 80.76%.

The near term Natural Gas Prices for the EU and UK fell this past week. (Note: figures are in dollar terms and Mmbtu.)

Not surprisingly, the high 12 month also slipped. Currently that 12 month high is January, 2024.

Just for comparison, the UK current pricing would suggest £1,484.27 per annum, while the 12 month high (Jan-24) would suggest £2,235.81. OFGEM has a cap around £2,047, which is line with the October/November futures. (Note: The OFGEM cap reduction is more of a reduced consumption number, not so much as lower price per unit. Make of that, as you wish.)

While it could be said that EU and UK natural gas prices are skirting with levels not seen in 2 years, there is still angst in their markets.