EIA’s February oil data has a few surprises

The US Energy Information Administration Tuesday released its monthly statistics for February. The data contained a few surprising numbers, reflecting the changing US petroleum landscape, and an unusually cold winter.

  • Movements of crude from the Midwest to the US Gulf Coast hit a record high 23.41 million barrels in February. That followed the opening of TransCanada’s 590,000 b/d Cushing Marketlink pipeline in January, which has accelerated the movement of crude from Cushing, Oklahoma to Nederland, Texas.
  • The increased flows, combined with growing US production, has sent USGC crude stocks soaring. There’s no reason to look at the EIA’s monthly data here–the weekly data shows USGC stocks at a record high 209.61 million barrels the week ending April 18. Analysts polled by Platts are looking for more builds ahead.
  • Cushing crude stocks have tumbled, but maybe they will start to build. Energy economist Philip K. Verleger made an interesting argument in his April 28 “Notes at the Margin.: only 35% of the 230.6 million barrel USGC terminal/tank farm capacity is available to lease, compared to 85% of Cushing’s 77.3 million barrels. With storage costs rising in the USGC, some sellers may temporarily leave barrels in Cushing, “where tanks are empty and storage costs are lower.”
  • US crude production continues to rise. Output at 8.033 million b/d in February was up only slightly from January, but up from 5.24 million b/d five years ago.
  • Output gains have been driven by Texas and North Dakota. Texas output at 2.92 million b/d reached another record high in February, having more than doubled from just three years ago. North Dakota output at 951,000 b/d in February was down from its record high 976,000 b/d in November, as frigid temperatures slowed growth.
  • The slowdown was temporary. The EIA’s weekly preliminarily data showed US production at 8.36 million b/d the week ending April 18. And as Platts’ Starr Spencer reported last week, citing Baker Hughes data, horizontal rigs in the US reached a record 1,245. These rigs are used heavily to extract oil from shale in Texas, North Dakota, Montana, Colorado, Pennsylvania, Ohio and many smaller emerging basins.
  • With all that extra production around, US refiners continued to push out imported barrels. The US imported 7.2 million b/d of crude in February, down 384,000 b/d from January.
  • Frigid temperatures in February bolstered demand for heating fuels, causing US exports of distillates to decline, and imports to rise. US ULSD imports in February rose 1.254 million barrels to 5.320 million barrels, highest since January 2011, EIA data showed. Of the 5.320 million barrels, 5.102 million of those went to the US Atlantic Coast, a record for the region.
  • The increased demand for heating fuels also led to a decline in US refined product exports. The US exported 23.26 million barrels of distillates in February, down from 34.24 million barrels in January, and a record high 42.89 million barrels in July, the EIA data showed.
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  1. :) at May 1, 2014 12:04 pm

    Let the good economic times roll,time to prosper like the 1990s..

     

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