I wrote an item two weeks back that compared our inventory builds in the Midwest. Here was some of that item, shown in italics:
Here is what we saw one year ago on the EIA inventories for the Midwest:
Those builds total 5.3MM in builds…if we use the same time frame from this year, the previous five weeks, Midwest builds have totaled 4.1MM (flat, +500, +1.3, +1.3, +1.3).
What about the next few reports after those, one year ago?
OK..now we are back to July 2nd and the report that came out this morning, in addition to last week’s report:
This now puts us another 200K ‘in the hole’ from the same seven-week period one year ago…which happened to cover the span of time where we saw the lows for the year in Conway, which was around the third week of June 2013. Things only got worse from there. To look at it a different way, we have built 1.4MM FEWER barrels year over year looking at the same crucial seven-week period.
It’s impossible to say whether or not we have seen the low, but I wouldn’t feel uncomfortable owning gallons at these levels. I remain very bullish on 4Q14 and as each week goes by with another inventory report that puts us further behind last year’s anemic building pace, I begin to extend my bullishness into the January 2015. Chew on this for a second:
The Midwest is DOWN 6.8MMfrom this time last year! That is NOT an insignificant number. If we had an extra month of summer building, I wouldn’t feel as bullish about that…but we don’t. We’ve also only built 1.4MM the last four weeks, or a month’s worth of reports.
I hate being the ‘sales guy’ who sounds like chicken little. But it’s July now…for those of you who are still significantly uncovered for 4Q14, I’d give a strong, strong look at adding some length.
File and save: here were Midwest builds for upcoming year over year timeframes:
THE REPORT: Propane inventories continued to build in the week of 6/27, increasing by 2.5 million to 56.2 million, as reported by the Energy Information Administration. Current inventory is now only 200,000 below 2013’s inventory level at this time and 3 million above the 5-year average of 53.2 million.
Builds on all Inventories: Midwest was up 300,000 to 17.5 million; Gulf increased 1.9 million to 32.1 million; East was up 100,000 to 4.2 million; and West was up 100,000 to 2.4 million.
Historical Averages: Mid-Con is down 1.6 million from last year and is down 2.5 million from the 5-year average of 20 million. Gulf Coast inventory is 500,000 above last year and 5.8 million above the 5-year average of 26.3 million. East Coast is up 400,000 from last year, and is 100,000 below the 5-year average of 4.3 million.
Propane imports were up 4,000 bpd to 57,000 bpd. East Coast was down 1,000 to 19,000; Midwest was up 3,000 to 28,000; Gulf remains flat at zero and West was up 1,000 to 10,000. Propane exports remained the same as last week at 301,000 bpd.
Other Inventory Numbers:
Crude Down: -3.2 mm
Motor Gas Down: -1.2 mm
Distillates Up: +1.0 mm