DOE Weekly Inventory Report Analysis 6/22/23
Overall petroleum inventories built even with crude showing a draw. Demand and exports appear strong but a supply surplus still exists.
DOE Weekly Inventory Summary
Total petroleum inventories are continuing to build which will put downward pressure on crude prices. The total petroleum inventory and WTI price relationship point toward a front-month price of $69/bbl, which is directly in line with current prices.
Inventories have been built by 42 Mb for the year and the trend is following one similar to 2013 and 2012. Both of these years built inventories until July but then diverged.
Source: EIA.gov
Total petroleum inventories rose by 1.3 Mb and inventories are 16 Mb below the 5-
year seasonal average (-1.26%). Total implied oil demand rose by .52 Mb/d with
distillate demand increasing by .4 Mb/d and gasoline demand increasing by .18
Mb/d. Total weekly oil demand hit its highest level since December of 2022.
Source: EIA.gov
Crude oil inventories fell by 5.55 Mb when including a 1.7 Mb draw from the SPR. A large contribution to the draw was the surge in exports, increasing by 8.89 Mb for the week. Although weekly data is noisy, the trend of elevated U.S. crude oil exports is evident when comparing 2023 year-to-date to previous years. Year-to-date average exports for crude in 2023 is .12 Mb/d higher than 2022, 1.1 Mb/d higher than 2021, and .89 Mb/d higher than 2019.
Gasoline inventories rose by .48 Mb for the week but demand improved to 9.38
Mb/d. Demand has consistently outperformed 2022 levels for gasoline, indicating
that economic conditions have yet to cool off even with continued pressure by the
Fed raising rates. Demand is up .3 Mb/d in June as compared to 2022. Gasoline
inventories remain well below the 5-year seasonal average (-17 Mb).
Distillate inventories rose by .43 Mb, but remain at a deficit of nearly 19 Mb to the 5-year seasonal average or 14%. Inventories remain tight across the U.S. which will
keep prices sensitive to surges in demand and refinery outages.
Propane inventories rose by 1.49 Mb for the week as exports fell by .3 Mb/d but
demand jumped by .47 Mb/d. Overall, inventories remain high even with the strong export numbers that have continued through 2023.