U.S. steps up oil products exports

The New Global Swing Producer

Forget Saudi Arabia! Who rose to the occasion to fill the void caused by disruptions in Libya and Iraq and Nigeria? No it was not Saudi Arabia but the good old Untied States of Oil! Ok, maybe we did not ship out oil but there is strong evidence that U.S. distillate and gasoline is filling that void as the U.S. went on a product export binge! While the majority of the day's focus was on the Fed and tapering the export number from the EIA should not be ignored.

The Energy Information Administration wowed the market in their weekly report, which is showing the U.S. oil industry is going export crazy. U.S. gas stocks fell by 4.03 million barrels while gasoline production increased last week, averaging over 9.4 million barrels per day. Distillate fuel production also increased last week, averaging 4.9 million barrels per day. U.S. crude oil imports averaged about 8.0 million barrels a day last week, up by 34 thousand barrels per day from the previous week. Over the last four weeks, crude oil imports averaged just under 8.0 million barrels per day, 501 thousand barrels per day below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 373 thousand barrels per day. Distillate fuel imports averaged 101 thousand barrels per day last week.

Oil prices (NYMEX:CLV13) sank after the Fed minutes as it is clear that all good things must come to an end. The Fed minutes suggest what most people expected and that is a September tapering! That gave us a sell off but maybe China data can support us.  Bloomberg News reported that resumed expansion this month, after shrinking the most in almost a year in July, and output at European factories and services companies improved, a sign the global recovery is strengthening. A preliminary Purchasing Managers Index for China by HSBC Holdings Plc and Markit Economics rose to 50.1 from 47.7, exceeding all 16 estimates in a Bloomberg News survey. A reading above 50 indicates expansion. Manufacturing (PMITMEZ) and services in the euro area also grew more than economists forecast in August, led by Germany.

Joe Silha, at Reuters, reports that U.S. natural gas inventories should end the stock building season this year higher than initially expected after mild late summer weather slowed demand, according to a new Reuter's poll of energy analysts.  It would be the first time in five years that gas in storage will not kick off the winter at a record high, but stocks should easily top out at levels that will calm any concerns about having enough supply to meet winter heating demand. Industry traders and analysts polled, by Reuters, on average expect inventories to peak this year at 3.852 trillion cubic feet, 2% below last November's record high of 3.929 tcf but 2 percent above average for that time of year. An earlier Reuter's poll in June had inventories peaking at 3.767 tcf.

Eileen Houlihan of Reuters reports that power production in the continental United States for the week ended Aug. 17 slid 5.2% from the same week in 2012 to 81,888 gigawatt hours  (GWh), according to data released Wednesday by the Edison  Electric Institute. Overall output fell for the fourth straight week and was down in eight of nine U.S. regions for a second straight week.

The largest year-on-year percentage drop in output was in New England, which tumbled 14.2% to 2,509 GWh, EEI said.  EEI is a power industry trade association. The West Central U.S., meanwhile, was flat on the corresponding week year-on-year at 6,461 GWh.  For the first 33 weeks of the year, power production totaled. For the 52 weeks ended Aug. 17, power production was also  down 1.1% from the corresponding period in 2012 at  3,962,320 GWh.

About the Author
Phil Flynn

Senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at pflynn@pricegroup.com. Learn even more on our website at www.pricegroup.com.


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