Commentaries

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from John Kemp:

Other oils — a worldwide best-seller

I realise there are a small number of people for whom the weekly US REFINING SUMMARY is not the most compulsive reading material, with a plot line to rival John Grisham and prose that bears comparison with Shakespeare. 
 
So for these few benighted individuals, I attach a simple graphic: 
 
http://graphics.thomsonreuters.com/ce-insight/EIA-OTHER-OILS.pdf
 
It shows the stock of "other oils" reported by refiners, pipeline companies and tank farm operators across the United States each week in the EIA's weekly survey. 
 
Other oils is a miscellaneous category of refinery products after gasoline, distillate, jet fuel, propane, residual fuel oil and part-finished oils have been separately accounted for. 
 
It includes, according to the EIA, "aviation gasoline, kerosene, natural gas liquids, LRGs, other hydrocarbons and oxygenates, aviation gasoline blending components, naphtha and other oils for petrochemical feedstock use, special naphthas, lube oils, waxes, coke, asphalt, road oil, and miscellaneous oils. Includes naphtha-type jet fuel beginning in 2004."
 
Now these are hardly what you might expect as major refinery products.  But it is one of the fastest growing parts of the US product inventory. 
 
The inventory of "other oils" has risen by +24.202 million bbl (+18%) in the seven weeks since Apr 10.  Other oil stocks (158.600 million bbl) are now +20.500 million bbl (+14.8%) higher than at the same time last year (138.100 million).  They are climbing exponentially, up by +3.600 million bbl last week alone. 
 
That amounts to a large amount of extra lube, asphalt, or petchem feedstocks.
 
So what exactly ARE the refiners producing and presumably storing here? 
 
It also looks rather like refiners have been producing and reporting these "other oils" in a bid to reduce over-production of something else (gasoline? distillate? resid?) amid soft demand. 
 
The implication is that the market is rather more over-supplied with refined products than a simple tally of gasoline and distillate inventories would suggest.

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