What went wrong?
The American Petroleum Institute (API) reported a huge draw this week for crude oil of 6.53 million barrels. U.S. crude inventories have grown by roughly 25 million barrels so far this year, according to API data, while the U.S. Strategic Petroleum Reserves fell by more than seven times that figure, at 194 million barrels. The draw in crude oil inventories was despite the Department of Energy’s release of 1.9 million barrels from the Strategic Petroleum Reserves in the week ending October 28, leaving the SPR with 399.8 million barrels.
U.S. crude oil production has remained flat for months. For the week ending October 21, U.S. crude oil production stayed at 12 million bpd, according to the latest weekly EIA data, within the same 11.9-12.1 million bpd range it has been in since the beginning of summer. At 12 million bpd, U.S. crude production is just a 300,000 bpd rise from the levels seen at the start of the year, and still a 1.1 million bpd shortfall from the levels seen at the start of the pandemic.
The API reported a draw in gasoline inventories this week of 2.64 million barrels for the week ending October 21, compared to the previous week’s 2.278 million-barrel draw. Distillate stocks saw a build this week of 865,000 barrels, compared to last week’s 635,000-barrel increase. Cushing inventories rose 883,000 barrels in the week to October 28. In the week prior, the API saw a Cushing increase of 70,000 barrels. NN: New math.. you release 200 million barrels from the emergency stock pile. At the same time your anti oil polices reduce production by 300 million barrels… Question what happens when your emergency reserves used for price manipulation runs out?