Natural Gas Inventory Report, August 4, 2023

The Energy Information Administration released their weekly report yesterday.

Nor surprising, the Pacific region still lags, but the South Central joined the hit parade this week, although the latter is well ahead of previous year storage percentages.

In California, natural gas consumption in the electric power sector fell 9% (0.3 Bcf/d) week over week, according to data from S&P Global, despite continuing high temperatures that resulted in 137 CDDs, or 34 CDDs above normal in the Riverside Area, outside of Los Angeles.

Select EU and UK storage...

Total EU rose to 86.31%, from last week's 84.49%. This number seems sufficient, but represents about a 94 day supply across the EU. This can vary widely, due to availability, consumption. etc. 

The UK, which relies on a steady supply, with limited storage... is currently at about a 4 day supply. Any disruption to their supply, would be immediate.

This can be seen in the current pricing versus the 12 month futures high. 

A quick snapshot of pricing in prior periods, compared to now. (All converted to USD exchange rates at date specified.)

It is a guessing game, as to direction, with no one really able to predict the weather, consumption, geopolitics, etc. At this point in time... rather stable, imho.

Gasoline consumption per latest EIA data, August, 2023

Gasoline prices (per AAA) rose from last report's $3.687, to $3.803. One year ago the price had fallen to $4.189, and was on its downward trajectory... into the early September lull, about $3.80. It rose a bit, then fell back to the December low.

Consumption slipped -0.8% week over week, and is +3.7% above year ago numbers. (This is a four week moving average). 

The import/export surplus of gasoline since last March 1st 2022, fell to +104.4M barrels. That is an -889K barrel decrease over the week.

I was again overly optimistic, with a projection of +5¢ for the week, and the result being much higher.

I do, however, think the recent runup has nearly run its course. So here goes a brave prediction... pump prices should steady and begin to fall in the -4¢ to -11¢ range.

Okay, it may be wishful thinking, but the cards that kept telling me there was upward bias, (although missing the extent), are now telling me... pump prices will ease off. 

Crude and Petroleum Product Inventories - August 02 2023

Data per the EIA weekly report. 

Crude stocks fell a whopping -17M barrels, from last week, and is -2.8% 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 +1.1% above normal.

Distillates inventory slid -796K barrels; and Gasoline inventories increased about +1.5M barrels. Distillates (-14.2%,-3.4%) and Gasoline (-5.3%, -3.3%) are both below 5 year and 3 year adjusted average inventories.

The SPR has remained stable for 3 weeks.

WTI is $79.45, compared to $78.94 (+06%), one week ago, and $89.74, one year ago(-9.9%).

Refinery output improved on a weekly basis, and has edged above year ago levels

For anyone interested, the U.S. has exported 793M barrels of crude and petroleum products, more than imported, since March 1, 2022. It jumped nearly 22.0M barrels this past week.

Overall, crude stocks remain somewhat healthy, compared to this time last year, with days supply at 26.6, to last year's 26.3 days.

Is it a rinse and repeat of April? At that time, the crude prices jumped and many reasons were given... yet prices fell back. This time the same reasons were given for the rise, but the prices are slipping. 

How much is hype and how much is real?

Natural Gas Inventory Report, July 28, 2023

The Energy Information Administration released their weekly report yesterday.

The Pacific Region slipped to -8.3% from last week's -7.9% last week's numbers, although year ago numbers edged up to -13.1% from -13.4%

Across much of the West, prices increased this week, particularly in California. In the Rocky Mountain region, the price at Cheyenne Hub in southeast Wyoming rose 16 cents from $2.24/MMBtu last Wednesday to $2.40/MMBtu yesterday. In California, the price at PG&E Citygate in Northern California rose 40 cents, up from $4.89/MMBtu last Wednesday to $5.29/MMBtu yesterday. The price at SoCal Citygate in Southern California increased $6.69 from $5.64/MMBtu last Wednesday to $12.33/MMBtu yesterday.

Ouch!!

 Select inventories of EU and UK... 

It should be noted that while percent of capacity is high... that capacity is generally only about a 3 month supply. It is much better than years past, but still dependent on weather and geo-politics.

Total EU rose to 84.49%, from last week's 82.53%.

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

 

Review of June data and the July PCE Report

A story of glass half empty versus a glass half full...

For months on end, the data has contained revisions of prior months being downward, which gave that current report a glass half empty kind of vibe.

For the past two months... the previous months data has been revised upward, which emits a vibe of glass half full for the current month.

That's a positive, imho.

https://www.bea.gov/news/2023/personal-income-and-outlays-june-2023

Certainly a downward trend is in full view across the board, when mentioning inflation...

The Annual PCE, ex food and energy, is also slipping.

This is good news, as it indicates "sticky" prices are starting their downward slide. Just in time, as energy prices seem to be edging up and food prices may as well. Not everything is rosy, but optimism is not unreasonable. 

EXCEPT, next month's projections are for PCE to come in around 3.4% and core at 4.4%. Is that the last dying gasp of inflation, or signs of things to come?

Quick Review of The Advance GDP report 2Q-2023

First off... a screen shot with some additions.

The report has some positives and some concerns. I would agree with the media reports of Gross private domestic investment carrying the load for the quarter, but is it sustainable... given recent slides and spikes.

I am a bit concerned about the Personsal Consumption Expenditures category, as it gives the appearance of losing steam. As the 70.7% indicates... it is a large part of the economy. It did gain, but lagged the overall. Additionally, the was quite a drop from 1Q performance, which itself was stellar... compared to previous recent quarters.

The trade deficit is weighing as heavily as some recent reports and is back into 2021 range. The big question is whether this will continue.

Lastly... government spending. I am a bit old fashioned, as I consider government spending as something that should match, but never exceed the overall economy... unless some dire circumstances are present. Not seeing that at present.

Gasoline consumption per latest EIA data, July 26, 2023

Gasoline prices (per AAA) rose from last report's $3.569, to $3.687. One year ago the price had fallen to $4.327, and was on its downward trajectory... into the mid September lull, around  $3.67. The current price is in line with last November's pump price.

Consumption slipped -2.2% week over week, and is +1.2% above year ago numbers. (This is a four week moving average). 

The import/export surplus of gasoline since last March 1st 2022, jumped to +105.3M barrels. That is an 1.7Mb increase over the week.

My past week prediction of a 5¢ rise in pump prices, turns out to have been optimistic, after an 11.8¢ rise. 

The current read of the cards, has a continued upward bias, with a near 6¢ increase. Hopefully, that is the extent.

I can think of many possible reasons for the rise, but they would just be speculation on my part.