Masters Of War

Come you masters of war You that build all the guns You that build the death planes You that build all the bombs You that hide behind walls You that hide behind desks I just want you to know I can see through your masks. You that never done nothin' But build to destroy You play with my world Like it's your little toy You put a gun in my hand And you hide from my eyes And you turn and run farther When the fast bullets fly. Like Judas of old You lie and deceive A world war can be won You want me to believe But I see through your eyes And I see through your brain Like I see through the water That runs down my drain. You fasten all the triggers For the others to fire Then you set back and watch When the death count gets higher You hide in your mansion' As young people's blood Flows out of their bodies And is buried in the mud. You've thrown the worst fear That can ever be hurled Fear to bring children Into the world For threatening my baby Unborn and unnamed You ain't worth the blood That runs in your veins. How much do I know To talk out of turn You might say that I'm young You might say I'm unlearned But there's one thing I know Though I'm younger than you That even Jesus would never Forgive what you do. Let me ask you one question Is your money that good Will it buy you forgiveness Do you think that it could I think you will find When your death takes its toll All the money you made Will never buy back your soul. And I hope that you die And your death'll come soon I will follow your casket In the pale afternoon And I'll watch while you're lowered Down to your deathbed And I'll stand over your grave 'Til I'm sure that you're dead.------- Bob Dylan 1963

Sunday, December 4, 2022

net oil imports at a record low leads to biggest drop in oil supplies in 41 months & leaves US oil supplies at a 21½ year low

the biggest drop in commercial crude supplies in 41 months leaves US oil supplies at a 21½ year low, Strategic Petroleum Reserve at a 38½ year low, oil + oil products supplies at an 18 year low as net oil imports hit a record low

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending November 25th indicated that after a drop in our oil imports, a jump in our oil exports, and another increase in our refinery throughput, we needed to pull oil out of our stored commercial crude supplies for the 10th time in 16 weeks, and by the most since June 21, 2019, despite a big jump in crude supplies that could not be accounted for.... Our imports of crude oil fell by an average of 1,027,000 barrels per day to average 6,037,000 barrels per day, after rising by an average of 1,504,000 barrels per day during the prior week, while our exports of crude oil rose by 706,000 barrels per day to average 4,948,000 barrels per day, which together meant that the net of our trade in oil worked out to an import average of 1,089,000 barrels of oil per day during the week ending November 25th, 1,733,000 fewer barrels per day than the net of our imports minus our exports during the prior week, and the lowest net import figure on record. Over the same period, production of crude from US wells was reportedly unchanged at 12,100,000 barrels per day, and hence our daily supply of oil from the net of our international trade in oil and from domestic well production appears to have averaged a total of 13,189,000 barrels per day during the November 25th reporting week…

Meanwhile, US oil refineries reported they were processing an average of 16,638,000 barrels of crude per day during the week ending November 25th, an average of 228,000 more barrels per day than the amount of oil that our refineries processed during the prior week, while over the same period the EIA’s surveys indicated that a net average of 1,997,000 barrels of oil per day were being pulled out of the various supplies of oil stored in the US. So, based on that reported & estimated data, the crude oil figures from the EIA for the week ending November 25th appear to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 1,452,000 barrels per day less than what our oil refineries reported they used during the week. To account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a (+ 1,452,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet in order to make the reported data for the daily supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus suggesting there must have been an omission or error of that magnitude in this week’s oil supply & demand figures that we have just transcribed....moreover, since last week’s EIA fudge factor was at (+733,000) barrels per day, that means there was a 719,000 barrel per day difference between this week's balance sheet error and the EIA's crude oil balance sheet error from a week ago, and hence the changes to supply and demand from that week to this one that are indicated by this week's report are off by that much, rendering those comparisons complete nonsense....however, since most everyone treats these weekly EIA reports as gospel, and since these figures often drive oil pricing, and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it's published, and just as it's watched & believed to be reasonably accurate by most everyone in the industry...(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer)….

This week's 1,997,000 barrel per day decrease in our overall crude oil inventories left our oil supplies at 808,200,000 barrels at the end of the week, which was our lowest total oil inventory level since March 2nd, 2001, and therefore at a new 21 1/2 year low...Our oil inventories decreased this week as an average of 1,797,000 barrels per day were being pulled out of our commercially available stocks of crude oil, while 200,000 barrels per day of oil were being pulled out of our Strategic Petroleum Reserve. That draw on the SPR, (the smallest draw since February), was an extension of the emergency withdrawal under Biden's "Plan to Respond to Putin’s Price Hike at the Pump" (sic), that was originally intended to supply 1,000,000 barrels of oil per day to commercial interests over a six month period from its inception to the midterm elections in November, in the hope of keeping gasoline and diesel fuel prices from rising over that time....The SPR withdrawals under that program had been fluctuating in recent weeks because the administration has been attempting to use the Strategic Petroleum Reserve to manipulate prices on a weekly basis; furthermore, Biden recently announced another 15,000,000 barrel release from the Strategic Petroleum Reserve to run thru December, while simultaneously announcing he'd buy crude to replenish the SPR if oil prices fall to or below the $67-72 a barrel range, effectively putting a floor under oil at that price.....Including the administration's initial 50,000,000 million barrel SPR release earlier this year, their subsequent 30,000,000 barrel release, and other withdrawals from the Strategic Petroleum Reserve under recent release programs, a total of 267,031,000 barrels of oil have now been removed from the Strategic Petroleum Reserve over the past 28 months, and as a result the 389,116,000 barrels of oil that still remain in our Strategic Petroleum Reserve is now the lowest since March 16, 1984, or at a new 38 1/2 year low, as repeated tapping of our emergency supplies for non-emergencies or to pay for other programs had already drained those supplies considerably over the past dozen years, even before the Biden administration's SPR releases. The total 180,000,000 barrel drawdown of the current release program, now scheduled to run through December, will remove almost a third of what remained in the SPR when the program started, and leave us with what would be less than a 20 day supply of oil at the current consumption rate...

Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 6,287,000 barrels per day last week, which was 0.9% less than the 6,335,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be unchanged at 12,100,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was unchanged at 11,700,000 barrels per day, while Alaska’s oil production was 3,000 barrels per day lower at 444,000 barrels per day but had no impact on the rounded national total. US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was still 7.6% below that of our pre-pandemic production peak, but was 24.7% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021...

US oil refineries were operating at 95.2% of their capacity while using those 16,638,000 barrels of crude per day during the week ending November 25th, up from their 93.9% utilization rate during the prior week, and the highest November utilization rate since 2018....The 16,638,000 barrels per day of oil that were refined this week were 6.4% more than the 15,631,000 barrels of crude that were being processed daily during week ending November 26th of 2021, but 1.0% less than the 16,798,000 barrels that were being refined during the prepandemic week ending November 29th, 2019, when our refinery utilization was at 91.9%, within the normal utilization range for late November...

With the increase in the amount of oil being refined this week, the gasoline output from our refineries was also higher, increasing by 196,000 barrels per day to 9,164,000 barrels per day during the week ending November 25th, after our gasoline output had decreased by 625,000 barrels per day during the prior week.This week’s gasoline production was still 3.0% less than the 9,649,000 barrels of gasoline that were being produced daily over the same week of last year, and 5.8% below the gasoline production of 9,941,000 barrels per day during the prepandemic week ending November 29th, 2019.  At the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 200,000 barrels per day to 5,311,000 barrels per day, after our distillates output had increased by 14,000 barrels per day during the prior week. And with that big increase, our distillates output was 9.0% more than the 4,872,000 barrels of distillates that were being produced daily during the week ending November 26th of 2021, and 0.9% more than the 5,263,000 barrels of distillates that were being produced daily during the week ending November 29th 2019...

With the increase in our gasoline production, our supplies of gasoline in storage at the end of the week rose for the 6th time in 16 weeks; increasing by 2,770,000 barrels to 213,768,000 barrels during the week ending November 25th, after our gasoline inventories had increased by 3,058,000 barrels during the prior week. Our gasoline supplies rose by less this week even as the amount of gasoline supplied to US users fell by 10,000 barrels per day to 8,317,000 barrels per day, because our imports of gasoline fell by 50,000 barrels per day to 535,000 barrels per day, and because our exports of gasoline rose by 240,000 barrels per day to 1,138,000 barrels per day. But after 31 gasoline inventory drawdowns over the past 43 weeks, our gasoline supplies were still 0.8% lower than last November 26th's gasoline inventories of 215,422,000 barrels, and about 4% below the five year average of our gasoline supplies for this time of the year…

With the big increase in our distillates production, our supplies of distillate fuels increased for the 12th time in 17 weeks and for the 25th time in the past year, rising by 3,547,000 barrels to 112,648,000 barrels during the week ending November 25th, after our distillates supplies had increased by 1,718,000 barrels during the prior week. Our distillates supplies rose by more this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, decreased by 190,000 barrels per day to 3,656,000 barrels per day, even as our exports of distillates rose by 148,000 barrels per day to 1,300,000 barrels per day, while our imports of distillates rose by 30,000 barrels per day to 152,000 barrels per day.... But after fifty-two inventory withdrawals over the past eighty-three weeks, our distillate supplies at the end of the week were were still 9.1% below the 123,877,000 barrels of distillates that we had in storage on November 12th of 2021, and about 11% below the five year average of distillates inventories for this time of the year...

Meanwhile, after the big decrease in our oil imports, the big increase in our oil exports, and the increase in oil used by our refineries, our commercial supplies of crude oil in storage fell for the 12th time in 20 weeks and for the 32nd time in the past year, decreasing by 12,581,000 barrels over the week, from 431,665,000 barrels on November 18th to 419,084,000 barrels on November 25th, after our commercial crude supplies had decreased by 3,690,000 barrels over the prior week. After this week's big decrease, our commercial crude oil inventories fell to around 8% below the most recent five-year average of crude oil supplies for this time of year, but were still almost 24% more than the average of our crude oil stocks as of the last weekend of November over the 5 years at the beginning of the past decade, with the disparity between those comparisons arising because it wasn’t until early 2015 that our oil inventories first topped 400 million barrels. And after our commercial crude oil inventories had jumped to record highs during the Covid lockdowns of the Spring of 2020, and then jumped again after February 2021's winter storm Uri froze off US Gulf Coast refining, our commercial crude supplies as of this November 25th were 3.2% less than the 433,111,000 barrels of oil we had in commercial storage on November 26th of 2021, and 14.1% less than the 488,042,000 barrels of oil that we had in storage on November 27th of 2020, and 6.3% less than the 447,096,000 barrels of oil we had in commercial storage on November 29th of 2019…

Finally, with our inventories of crude oil and our supplies of all products made from oil near multi-year lows over the most recent months, we are also continuing to watch the total of all U.S. Stocks of Crude Oil and Petroleum Products, including those in the SPR.  In spite of the gasoline and distillates inventory increases we've already noted for this week, that big drop in crude supplies meant that the total of our oil and oil product inventories, including those in the Strategic Petroleum Reserve and those held by the oil industry, and thus including everything from gasoline and jet fuel to propane/propylene and residual fuel oil, fell by 10,173,000 barrels this week, from 1,610,605,000 barrels on November 18th to 1,600,432,000 barrels on November 25th, after our total inventories had increased by 1,740,000 barrels during the prior week. This week's decrease left our total petroleum liquids inventories down by 188,001,000 barrels over the first 47 weeks of this year, and at the lowest level since June 11, 2004, or at a new 18 year low...

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