RE:RE:UP or DownPersonally @Cobalt I agree with the undersupplied comment - my rationale below.
While I agree with your two production increase numbers, they don't account for 220mb going back into the SPR
January 06, 2023 - 08:29 AM
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Post# 35206369
Supply / Demand for 2022 out of balance - 220mb
Crude Oil .................................................... 793.0 -218.5 -21.6% Commercial (Excluding SPR)1 ............... 420.6 2.8 0.7% Strategic Petroleum Reserve (SPR)2 ..... 372.4 -221.3 -37.3 US Production is relatively flat at 12mb (last week saw a small increase to 12.1mb) per day
The SPR in 2022 was drawn down by 221.3mb, and given inventories in the US are basically flat at 420.6mb, this draw from the SPR was consumed, refined or exported - it no longer exists.
That means the US demand exceeded 'conventional" supply by 221.3 mb
Where does that supply come from now, given the obvious excess demand, in 2023?
Will Imports from Canada now begin to increase to offset the excess US demand?
Will more be released from the SPR?
Is Venezuela or Mexico going to be involved?
That 221.3mb is 4.3mb per week...
That is the current excess demand over supply. 4.3mb excess demand per week. 600k barrels per day excess demand.
It won't balance by itself. SPR draws stop. that supply has to come from somewhere...either from production, imports, or stock draw-downs
Environment in the US, including Biden's oil policies are a wall in front of ramping up US production
Stock draw downs will cause shortages at the pumps, refinery issues, and higher prices
Increased Imports benefit Canada, and WCS differential decreases
Cheers folks
Cobalt wrote: I dont get this undersupplied talk? 2.5 million equivalent new supply in 22 and 1 million more in 23 so 3.5 million more then squares your market now what? and yes the chart shows us that.