Crude oil suffered a big slide today, as WTI closed at $69.75, or off $2.17 on the day from yesterday’s close. Crude’s 6M+ inventory build from this morning’s EIA’s was…
After yesterday’s big weather conversation, we turn our attention back to inventories. But before we do, I want to thank you for reading yesterday’s post, linked here. I assume you looked at it, as over half of the propane industry clicked on that post, more than 1,000 retail companies in all. It was the most read piece we have published at The Propane Buzz, and we greatly appreciate your interest.
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PROPANE INVENTORIES: We saw a build of 2M/bbls of propane this past week, as production was once again over 2M/bpd. The build was in the face of 979,000/bpd of exports, but domestic demand was off roughly 400,000/bpd.
Given how warm the United States was for the reporting time period, I fully expected to see another build in propane, as I wrote last week. However, the temperatures during next week’s reporting period, which will be for the week we are experiencing right now, are much, much colder. Perhaps this will be the last build with a two in front of it until next Spring. We drew down 1.2M/bbls one year ago next week, and that was a warm October, and exports were over 900,000. HOWEVER, daily production is over 200,000/bpd stronger this year than last year, so it will be interesting to see that balance out.
National inventories are now at 82.3M/bbls, compared to 78.8M/bbls one year ago. The Gulf built over 2M/bbls this past week while Conway stayed the same, at 27.9M/bbls. The five-year average October to March Conway seasonal draw is 15.5M/bbls…so unless we get a start to finish cold winter, or at least a very cold Dec and Jan, I just don’t see Conway spike concerns barring some geopolitical factor…certainly not fundamentally at this time.
Here is my short video breaking down the inventory report, and what it means, in greater detail:
CRUDE OIL: Commercial crude stocks built over 6M/bbls this past week, and WTI is getting crushed, off over $2/bbl as of this writing. This was a fairly significant ‘resetting’ report, as the markets were mulling over which wind to follow…some tricky geopolitical headlines, or follow the trend of the inventory builds we have seen, which are easing some supply related concerns around the globe.
Propane prices have moved down with today’s inventory reports. MTB had been done at $1.0050 early this morning, but the last deal done has been $.9600 in MTB. The last deal done in Conway has been $.8600, off from the morning high of $.8800.