Many have started to talk about how full US storage is. Some even believe it is going to be full in just a few weeks. I saw a post stating US storage would be full in 8 weeks. Even some mainstream articles lead one to believe that US storage is just about full. The problem is data is being mixed and matched.
I saw an article stating Gulf Coast (PADD 3) working storage is about 302 MM barrels. The same article stated PADD 3 inventory was about 250MM bbl--EIA reported 271MM bbl in the latest week. That would put utilization at almost 90%. But wait, the EIA storage report from Nov. 2015 showed PADD 3 utilization at 58%, while inventory has risen only 13% since the September reporting date. That would imply that PADD 3 storage is only about 66% utilized--58% x 1.13=66%. This is indeed the case. Why? Because total PADD storage included pipeline, tanker and rail storage, while working storage capacity does not include capacity in pipelines, tankers or rail cars. So using the Sept. 2015 EIA storage report as a guide, Gulf Coast inventory in refineries and tank farms is about 206MM bbl. 206/302 = 68% utilization.
If we repeat this calculation for the Midwest (PADD 2) and the Cushing portion of PADD 2 the following is found. PADD 2 is 79% utilized and Cushing is 90% utilized. Overall US total refinery and tank farm storage is between 67% and 70% utilized. The US has 551MM bbl of tank farm and refinery storage for crude, with about 371MM bbl in that storage. The remainder of the reported 523MM bbl of storage is mostly in pipelines, which likely are not 100% full and in tankers and rail cars. Given how cheap lease rates are now on rail cars, it is likely there are a lot of empty rail cars around the country as well.
No comments:
Post a Comment