The port of Baltimore is a significant distribution hub for petroleum products in the Central Atlantic (PADD1B). With the collapse of the F. S. Key bridge, the all of the terminals within the harbor are blocked. More to come - stay tuned. The port of Baltimore is the 22nd largest "import" port for petroleum products - so is not a major entry location for products entering the United States....

Wanted to share this superb paper "Natural Gas in the transition to Low-Carbon Economies. The case of Latin America and the Caribbean" produced by @OLADEORG

I'm no expert on LatAm natural gas markets, I found this report a great comprehensive read.

olade.org/wp-content/upl… Some highlights:

Apropos of nothing, I'd like to share a theme I personally think is going to rise to prominence in energy discussions:

I call it "Circular reference errors" in the energy transition

Going to be a long 🧵 but hang in there... Circular reference errors in the energy transition. Excel jockeys are familiar with the error message that pops up when creating a formula that makes includes part of itself or the same cell more than once. i.e. the solution to a problem is connected to a problem.

U.S. distillate supply - a hot topic of late. Some basic thoughts, but mostly charts... U.S. distillate inventories typically build between May and September. This year was actually a pretty typical year when compared to the five-year average, although that is skewed because of 2020.

A long🧵on the monthly U.S. crude oil supply adjustment...(an honest, best effort, attempt, to help.) EIA’s latest round of monthly petroleum data is jam packed with interesting information and details about what’s going on with U.S. and to many degrees, with international markets. But one number in particular is gaining more and more attention – the crude oil supply “adjustment”

Refining sector and Russia: Russia's invasion of Ukraine resulted in an unprecedented reshuffling of global refined product trade. A 🧵... Rerouting Russian product flows is more complicated than for crude oil. Tenders and contracts for products often have product specifications (sulfur, octane, etc.) tailored to specific markets.

U.S. Rail Strikes: Remember, the U.S. motor gasoline supply chain is very dependent on ethanol volumes moved by rail. U.S. refineries produce "BOB", or the petroleum component of motor gasoline, that is below retail pump octane specifications i.e. 85 rather than 87 regular. That missing octane is supplied by ethanol.

U.S. Rail Strikes🚂: Although not the primary transport mode for refineries to receive crude oil supply, crude by rail is an important part of the supply chain - especially on the U.S. East and West Coast. (🧵) #OOTT Refineries on the U.S. East Coast are the most reliant on crude by rail supplies (6.5% of receipts in 2021), a majority of which is domestically sourced crude oil.

In short: Refineries are stuck between the hammer and the anvil.

Here's a 🧵on the reasons why...(with memes!)

Based on the new @IEF_Dialogue and @SPGCI report.

ief.org/news/ief-oil-r… Even in less complicated times, refining was a challenging sector in which to make investment decisions.

Refining Capacity is going to be tight for the next few years, resulting in higher product crack spreads and more volatility. Here's a 🧵on the reasons why. 1) Between 2020 and mid-2022, 3.8 mb/d of refinery capacity was closed, but demand since 2020 has recovered by 5.8 mb/d. That means all available capacity needs to run max-out in order to meet demand.

An underappreciated factor in markets right now, the feedback loop of high natural gas prices and demand for petroleum products. 🧵 Refineries use significant amounts of natural gas, primarily for heat needed in distillation and chemical processes, as well as an input to make hydrogen.

For what it's worth, here is my non-conspiracy, non-financially motivated, theory on what's going on with U.S. weekly motor gasoline product supplied versus retail-oriented data. EIA's weekly product supplied does not capture motor gasoline being pumped OUT of retail gasoline stations.
(I REALLY hope you knew that already)

To be clear, I do not know anything special about what happened with EIA's data servers a few weeks ago, but I take them at their word that it was an electrical issue in the building and they were forced to switch to backup systems. If you've ever physically been inside the Forrestal building, you too would understand how highly probable an electrical problem is there. Not only is the outside a soul-crushing concrete abomination, the interior is equally irksome and unpleasant.

Personally, I think this is far bigger news than OPEC.

IMF basically says, let prices do their job and encourage shifts away from fossil fuels and greater energy efficiency.

blogs.imf.org/2022/08/03/how… "Governments cannot prevent the loss in real national income arising from the terms-of-trade shock. They should allow the full increase in fuels costs to pass to end-users to encourage energy saving and switching out of fossil fuels."

🧵on U.S. distillate (diesel) markets #OOTT

Long story short - the U.S. East Coast had a large part of it's import blanket pulled out from under it. Looking at the PADD1 distillate supply/demand balance we can see that as in-region refinery production decreased due to refinery closures, PADD1 first relied on receipts (pipeline/tanker/barge) from other PADDs.

Those of you who've followed me for a long time know, I have been a fan and defender of EIA my entire career. Sadly, that comes to an end today. This new API data browser is a massive step backwards in terms of usability and accessibility for EIA's data.

https://twitter.com/EIAgov/status/1524756959374815233

The old system was massively easier to use and understandable than this V2. I could navigate to what I wanted, click the key, get the code, copy/paste into excel, then run the EIA excel plug-in and boom my data appears. But now...

Allow me to head off any confusion about recent U.S. - Russia import numbers. (thread) #OOTT Russia is not a significant source of crude oil for U.S. refineries. But because total U.S. crude oil imports have fallen, Russia's share has gone up - that's basic math.

Interesting: Many vehicle manufactures have turned to Turbochargers - squeezing more power out of smaller engines but needing higher octane gasoline (premium) for optimal performance (i.e. what the EPA sticker says). #OOTT This means more cars likely say "Premium recommended" (i.e. to get EPA sticker numbers), and not "Premium Required". At the same time, the share of premium gasoline sales is rising - up to 13%, the highest it's been since ~2003, and have recovered faster than other grades.

Despite the many events and developments in the oil world in 2019, the thing I think was the most influential = Satellites.
(Thread) #OOTT There are now numerous satellite data service providers and entirely new analytical insights built from them. From the tracking of ships, reading of inventories from space, to tracking oil rig deployments, and even pipeline construction.

In September 2019, the United States exported 89,000 barrels per day (b/d) more petroleum (crude oil and petroleum products) than it imported, the first month this happened since monthly records began in 1973. #OOTT #TWIP
bit.ly/38b67Kn The United States is a net exporter of petroleum!
*me in my office when data was released...

The EIA'S Weekly Petroleum Status Report provides weekly estimates of U.S. crude oil supply, including a measure of how well the supply of crude oil and the disposition of crude oil balance with each other. This measure is called the "adjustment". #OOTT bit.ly/32tS2od If the reported supply and disposition of crude oil balanced perfectly each week, the adjustment would equal zero. For several reasons, however, this is rarely the case. Hence the need for the adjustment.