Mon, Aug 02, 2021 @ 07:13 GMT
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Crude Oil Prices Fell as US Inventory Gained for the First in 7 Weeks, While OPEC+ Output Produced More than Quota

The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks gained -3.42 mmb to 1124.86 mmb in the week ended September 4. Crude oil inventory gained +2.03 mmb (consensus: -1.34 mmb) to 500.43 mmb. Stockpile rose in 4 out of 5 PADDs. PADD  2 (Midwest) inventory alone increased +1.19 mmb during the week. Cushing stock added +1.84 mmb to 54.35 mmb. Utilization rate plunged -4.9 percentage point to 71.8% while crude production added +0.3M bpd to 10M bpd for the week. Crude oil imports increased +0.52 bpd to 5.4M bpd in the week.


Concerning refined oil product inventories, gasoline inventory fell -2.95 mmb to 231.91 mmb as demand fell -4.51% to 8.39M bpd. The market had anticipated a -2.38 mmb decrease in stockpile. Production plunged -6.33% to 8.83M bpd while imports slipped -0.05% to 0.57M bpd during the week. Distillate slipped -1.68 mmb to 175.85 mmb. The market had anticipated a -0.56 mmb decrease. Demand sank -5.24% to 3.71M bpd. Production slumped -7.97% to 4.4 mmb while imports slipped -0.37% to 0.16M bpd during the week.

A day earlier, the industry-sponsored API estimated that crude oil inventory gained +2.97 mmb during the week. For refined oil products, gasoline inventory fell -6.89 mmb while that for distillate was up +2.29 mmb.

Separately, the latest report shows that OPEC+ compliance improved to 97% in August, from 96% a month ago. August was the first month that the total output cut target is reduced to 7.7M bpd, compared with 9.7M bpd previously. The 10 OPEC members bound by quotas achieved a compliance of 97%, up from 94% in July. Saudi Arabia, the largest oil producers in the cartel, produced 8.95M bpd in the month. While this was slightly below the quota of 8.99M bpd, it marks a +0.5M bpd increase (or +5.9%) from July’s output. Iraq, a country that has been criticized for excessive production, recorded output of 3.74M bps last month, compared with the quota of 3.8M bpd. Compliance jumped to 108% from 83% in July. However, note that Iraq’s output cut was still below target if the additional compensation cut of 0.4M bpd is taken into account. Compliance of Nigeria also improved to 78%, from 65% in July. UAE produced +2.74M bpd in August, significantly higher than the quota of 2.59M bpd. Its compliance dropped from July’s 97% to 74%. State oil company ADNOC indicated it will reduce its October term allocations by 30% to make up for the difference. Concerning non-OPEC producers, aggregate compliance slipped -0.1 percentage point to 98%. Russia continued to produce slightly above the quota. From a month ago, the country’s output of 9.09M bpd marks a +0.5M bpd increase (or +5.82%) from July.

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