DOE Week of May 4th

  • A bullish report this week.
  • Excess inventories, by turnover days, for CGD were down marginally, but crude was up again.  Distillate inventories are tight.
  • The Brent spread, now at $6 / barrel, suggests tremendous demand strength outside the US.
  • Refinery runs were below last year’s record levels, but solid
  • Net crude imports collapsed this week, 1.5 mbpd below this week last year
  • Net product exports remain range bound
  • Gasoline supplied came in strong again this week, with a lot of chop recently.  Demand is up 2.2% on a 4 wma basis yoy, impressive considering pump prices
  • Crude and condensate production continues very strong, up 91 kbpd compared to last week.  On a 3 mma basis, up at a +1.9 mbpd / year pace; and on a 4 wma basis, +2.3 mbpd / year. 
  • As we forecast last week, equities continue to advance rapidly, which we think continues for the next 2-4 weeks
Excess Inv May  4.png

•Based on turnover days adjusted for exports (right), excess crude rose 3.0 mb to 40 mb

•On the same basis, excess GDJ fell 6.8 mb to +5 mb.  Distillate and jet are below normal.

•Excess CGD was down 4.0 mb to 50 mb by turnover days. 

•Overall a mildly bullish report, but crude inventories continue to rise by turnover days

WTI May 4.png

•Incredible strength in oil prices, with moves all across the curve, and gains of $3.50 / barrel compared to last week

•Backwardation remains steep

•Again, the market is categorically refuting the notion that US shale production will overrun global oil demand growth in 2019

•The Brent spread stands at $6 / barrel – very bullish, consistent with exceptional demand strength outside the US