PROPANE INVENTORIES grew by 700,000/bbls this past week according to the EIA report released today, May 2nd. It was for the weekly period ending April 27th. This puts current national inventory levels at 36.4M/bbls, which is 3.3M/bbls behind national levels one year ago this week.
Propane exports were not as robust as some folks had predicted, checking in at 864,000/bpd, off from last week’s 1.071M/bpd. There has been talk of potential cargo cancellations for May as the industry is still expecting propane production to increase and propane inventory gains to be robust this spring and fall. Propane production was up nearly 40,000/bpd this week over last week.
The bigger news today is that crude oil showed a build 6.6M/bbls, and the strengthening US dollar could begin to put some downward pressure on crude oil prices. However, May 12th will be a day to watch as that is the self imposed deadline from the United States with regards to ‘revisiting’ the Iran nuclear deal, and could lead to sanctions on Iran if America leaves the deal, which would have an impact on Iran’s crude exports.
US BANKS RAISING CRUDE EXPECTATIONS: The hedge funds are already very, very long with their crude bets and a poll of banks has raised the average expected 2018 price for crude for the seventh straight month.
This, from the Wall Street Journal:
“Banks raised their forecasts for oil prices for the seventh month in a row in April on the back of heightened geopolitical risks and OPEC-led production cuts.
The price of Brent crude—the global benchmark—has risen by roughly 50% over the past year, bolstered by the Organization of the Petroleum Exporting Countries’ deal to cut production and tensions in the Middle East that could threaten supply.
Brent is now expected to average over $64 a barrel this year, according to a poll of 14 investment banks surveyed by The Wall Street Journal. West Texas Intermediate, the U.S. standard, should average just above $60 a barrel, the poll showed. Both estimates are a more than $1 increase on the forecast from March’s survey”
HARVEST UPDATE: United States farmers made some strong moves last week with the dry weather related to corn planting. However, the top five largest corn producing states are still lagging behind their five-year averages. Image courtesy of Kevin Van Trump: