Market Pulse
U.S. crude inventories rose by 6.2 million barrels for the week ending March 13, reaching 449.3 million barrels, approximately 1% below the five-year seasonal average, despite robust exports near a record 4.9 million barrels per day; this build was supported in part by a 3.6 million barrel positive “unaccounted-for” adjustment, potentially reflecting increased gathering of smaller, truck-dependent production. While frac crew activity has risen in recent weeks, most gains predate recent geopolitical escalation, and upstream investment is expected to increase at a measured pace. Refined product balances tightened, with gasoline inventories falling 5.4 million barrels on stronger demand, higher exports, and minimal imports, and distillate stocks declining 2.5 million barrels primarily due to elevated demand despite weaker exports; propane inventories, however, increased by 0.8 million barrels amid softer demand and slightly reduced exports, though near-term export data shows a potential rebound. Broader market dynamics remain supportive, with crude prices rising amid constrained tanker traffic through the Strait of Hormuz and supply disruptions across key producers, while total U.S. petroleum demand averaged 21.0 million barrels per day over the past four weeks, up 2.1% year over year, alongside modest gains in gasoline and distillate consumption.
Fundamentals
EIA’s Weekly Petroleum Inventory in MM’s BBLS
| Commodity | US Inventory | Change | 3 Yr Ave | CURRENT MARKETS |
|---|---|---|---|---|
| Crude Oil | 449.3 | 6.2 | 454 | WTI Crude: 1.96 |
| Gasoline | 244.0 | -5.4 | 234 | Heating Oil: 0.2428 |
| Distallates | 116.9 | -2.5 | 112 | RBOB: 0.0879 |
| Commodity | US Inventory | Change | Midwest Invent | Change |
|---|---|---|---|---|
| Propane | 72.5 | 0.8 | 14.1 | 0.3 |
Propane
Propane prices declined at the start of the week. Inventories remain unusually elevated for this time of year, as winter heating demand typically drives stock draws through April. Despite strong export activity, inventory levels continue to exceed the five-year average.
With exports increasing, U.S. propane is expected to compete with butane for Gulf Coast terminal capacity, particularly amid ongoing supply disruptions in the Middle East. Additionally, seasonal fog has already constrained LPG cargo loadings for March.
Propane’s percentage of WTI remains weak, with Conway at 31.5% and Mt. Belvieu at 35%.
Iran War
- Israel struck Iran’s South Pars gas field, the largest natural gas field in the world
- Explosions also hit oil and petrochemical facilities in Asaluyeh, a critical energy hub
- Concerns are growing that Iran may have begun laying naval mines, potentially using small fishing vessels or commercial ships to deploy them covertly.
- Some gas production was halted, 100 million m3/day, and facilities were shut down to contain fires
- Iran has threatened retaliation against Gulf energy infrastructure in Saudi Arabia, UAE, and Qatar
- The Strait of Hormuz is effectively disrupted/closed, impacting 20% of global oil flows
- Tanker traffic has collapsed and shipping is being rerouted or halted
- High-level assassinations and missile exchanges between Iran and Israel, with spillover fighting in Lebanon and attacks on U.S. interests in Iraq
Quote
“Do the best you can until you know better. Then when you know better, do better.”
-Maya Angelou
Disclaimer: The data, information and related graphics (collectively, “Information”) is for general information use only and is compiled from sources believed to be reliable. Dale Petroleum Company does not guarantee its accuracy or completeness, nor does DPC assume any liability for any inaccurate or incomplete information. The Information is not intended to be a research report nor an analysis of a company and it should not be relied upon for making investment decisions. The information is subject to change without notice, is for general information only and is not intended as any offer or solicitation with respect to the purchase or sale of any financial instrument or as personal investment advice.