Just a quick update on the highlights of the weekly EIA report:
U.S. crude oil refinery inputs averaged over 15.8 million barrels per day during the week ending July 20, up 172,000 barrels per day from the previous week’s average and the highest average since the week ending September 22, 2006. Refineries operated at 91.7 percent of their operable capacity last week.
Utilization is creeping back up, but still a good 5 percentage points short of where it normally is this time of year.
U.S. crude oil imports averaged nearly 10.4 million barrels per day last week, up 3,000 barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged nearly 10.4 million barrels per day, or 66,000 barrels per day more than averaged over the same four-week period last year.
Oil imports are not quite in record territory, but remain strong.
Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged nearly 1.7 million barrels per day, the highest weekly average ever.
Wow! I just wonder if this isn’t an accounting artifact after last week’s inventory numbers came in really low.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) declined by 1.1 million barrels compared to the previous week. However, at 351.0 million barrels, U.S. crude oil inventories remain well above the upper end of the average range for this time of year. Total motor gasoline inventories increased by 0.8 million barrels last week, but remain below the lower end of the average range.
Now, imagine that without record gasoline imports and you can see why imports have really kept us out of trouble this year (not that we are out of the woods yet).
Over the last four weeks, motor gasoline demand has averaged nearly 9.7 million barrels per day, or 1.2 percent above the same period last year. Distillate fuel demand has averaged nearly 4.1 million barrels per day over the last four weeks, up 2.8 percent compared to the same period last year. Jet fuel demand is down 3.0 percent over the last four weeks compared to the same four-week period last year.
I continue to be amazed that these gasoline prices have not impacted demand.
I spent a little while trying to resolve an apparent discrepancy in This Week in Petroleum. The report shows OECD oil stocks near the bottom of the average range. I watch this pretty closely, and I was sure they were in the middle of the range. That’s why I have been saying that Saudi can still rightly say that inventories are OK, therefore there is no need to increase production. But then I finally read for comprehension and noticed that the graph was only for OECD Pacific stocks. These are indeed close to the bottom of the range. Of course this is where Saudi has been enforcing a lot of their production cuts, so they may indeed soon have to open the taps (if they can), especially if oil prices continue to test $80/bbl.
Robert-
I don’t understand either, why higher gasoline prices do not depress demand. My anecdotal answer (based on asking everyone I meet) is that $4 a gallon is the magic mark. Inetrestingly, this is equal to $1 a gallon, back in 1979, when demand did fall after a price spike.
Also, we enjoy or suffer 2 million immigrants every year, almost all adults. They buy and use cars, many to get to work. And going to work is not optional.
As a former Brooklyn Dodger fan, I can tell you, “Wait ’till next year.”
People are buying more fuel efficient cars, when they do buy. In California, we already use less gasoline every year. Prius are everywhere. Hybrids.
But if I ask a guy who uses a ver large p/u for his cabinet business, he will say, “I will switch to a more fuel efficient car when it hits $4 a gallon.”
So, we are close. Look for a flatline soon, then declines out a couple of years. It will take time.