Monday, October 10, 2022
Despite OPEC moves and refinery outages, oil keeps pumping in US.But big reports later this week
With gas prices at or above $4 a gallon in Wisconsin these days, I wanted to take another look at this country's supply-and-demand situation for the product, and oil in general. First off, while there has been (conveniently timed) disruptions with refinery outages in both the Midwest and the West Coast in recent weeks, the amount of oil being produced in America still remains at or above 12 million barrels a day. That's basically what we were doing in early 2019 when prices weren't nearly this high, and well above the 11 million that was being pumped out when President Biden took office in January 2021. the Biden Administration is still releasing oil from the Strategic Petroleum Reserve and delivering it to refiners through the end of next week, so put that 600,000 or so a day on top of what you see in that graph. On the demand side, I wanted to look at the full weeks after Labor Day in recent years, as that removes the distortions of the holiday and gives us a good reference for what consumption looks like in a normal school/work period. Consumption had trended down for the first two weeks after Labor Day this year, but there was a sizable amount of usage in Week 3, the last week reported so far.
now that Q3 profits have been locked in, and that along with the traditional lower driving levels of October should counteract any limits on oil supply that start hitting the system in the coming weeks.
Posted by Jake formerly of the LP at 6:32:00 PM