Global Growth Slowing

  1. The pace of oil’s activity slowed pre-Thanksgiving
  2. Global economic activity eases
  3. West Texas crude tests support
  4. Winter Henry Hub prices projected to exceed $6.00/mmBtu.


Alan Levine, Chairman

(202) 333-5380


The Matrix

This week celebrates Thanksgiving. The holiday has become an iconic national symbol of family gathering, rooting for favored sports teams (Go Caps for most of Powerhouse, Go Pens for David Thompson, our lone Pittsburgher,) and often lengthy visits to Home, wherever Home might be.

But regular life goes on. The economy and the oil and gas industry supporting it remain important concerns, even as the pace of activity eases just a little.

The Chicago Mercantile Exchange, parent of NYMEX, sees divergence in expectations among the industry’s participants.

  • Slowing global economic growth could offset low U.S. inventories
  • Volatility in options pricing are twice pre-pandemic levels
  • Related options statistics reflect a greater likelihood of higher rather than lower prices.

It may be impossible to reconcile such different messages from the market, but their very existence points to the challenges facing both buyers and sellers of petroleum as planning for 2023 is close upon us.

WTI crude oil dipped to $77.24 before barely regaining $80 at weekend. This is the first time WTI has been in the $70’s since September 27, when $76.42 was tested. This constitutes major support. If broken, the market’s next support will be $62.43, last seen nearly a year ago during the week ended December 3, 2021.

Recent price activity has been bearish for products; both ULSD and RBOB ended last week in the red. ULSD fell short trying to finish on an up-note but failed to match even the day’s opening price. But on Friday, prices fell early and subsequently fought higher. Spot futures ULSD prices broke hard below strong support at $3.50 — based on a news story, now denied, about new OPEC production. Even so, it shows the fragility of current market sentiment.

Powerhouse’s chart, Days of Supply, shows U.S. supply availability still below the low of past five years. Fortunately, the situation has not deteriorated further, and as the average low moves lower, markets are relatively better served.


Supply/Demand Balances

Supply/demand data in the United States for the week ended November 11, 2022, were released by the Energy Information Administration.

Total commercial stocks of petroleum fell (⬇) 6.5 million barrels to 1.2167 billion barrels during the week ended November 11, 2022.

Commercial crude oil supplies in the United States decreased (⬇) by 5.4 million barrels from the previous report week to 435.4 million barrels.

Crude oil inventory changes by PAD District:

PADD 1: Down (⬇) 0.7 million barrels to 7.7 million barrels

PADD 2: Down (⬇) 2.8 million barrels to 108.7 million barrels

PADD 3: Down (⬇) 2.4 million barrels to 245.0 million barrels

PADD 4: Plus (⬆) 0.6 million barrels to 23.9 million barrels

PADD 5: UNCH at 49.5 million barrels


Cushing, Oklahoma inventories were down (⬇) 1.6 million barrels from the previous report week to 25.6 million barrels.

Domestic crude oil production was up UNCH from the previous report week at 12.1 million barrels daily.

Crude oil imports averaged 5.559 million barrels per day, a daily decrease (⬇) of 895,000 barrels. Exports increased (⬆) 341,000 barrels daily to 3.862 million barrels per day.

Refineries used 92.9% of capacity; 0.8 percentage points higher (⬆) than the previous report week.

Crude oil inputs to refineries increased (⬆) 63,000 barrels daily; there were 16.152 million barrels per day of crude oil run to facilities. Gross inputs, which include blending stocks, rose (⬆) 137,000 barrels daily to 16.688 million barrels daily.


Total petroleum product inventories rose (⬆) by 1.2 million barrels from the previous report week, falling to 781.3 million barrels.

Total product demand decreased (⬇) 179,000 barrels daily to 21.087 million barrels per day.

Gasoline stocks increased (⬆) 2.2 million barrels from the previous report week; total stocks are 207.9 million barrels.

Demand for gasoline decreased (⬇) 269,000 barrels per day to 8.742 million barrels per day.

Distillate fuel oil stocks increased (⬆) 1.1 million barrels from the previous report week; distillate stocks are at 107.4 million barrels. EIA reported national distillate demand at 3.863 million barrels per day during the report week, a decrease (⬇) of 297,000 barrels daily.

Propane stocks increased (⬆) by 0.1 million barrels from the previous report week to 87.8 million barrels. The report estimated current demand at 943,000 barrels per day, an decrease (⬇) of 262,000 barrels daily from the previous report week.


Natural Gas

Henry Hub spot natural gas futures prices popped on November 7, reaching $7.22. They have since fallen back but have not formed a discernible trend. They ended at $6.30 last Friday.

Market action on November 7 offers a useful guidepost. After gapping higher from the previous trading day, bullish forces failed to maintain control of the market and the front-month price quickly drifted back to the $6.00 zone. Last week saw a modest attempt at base-building. The intra-day high from November 7th at $7.221 now serves as key resistance in the short -term.

This would be consistent with DOE’s forecast that Henry Hub spot prices should average above $6.00 this winter, the highest average Henry Hub price since winter, 2009-2010. The projection includes recognition that storage levels at the start of the withdrawal season were 3% below average and that demand for LNG would recover as LNG exports from Freeport, LA resume.

According to the EIA:

Net [natural gas] injections into storage totaled 64 Bcf for the week ended November 11, compared with the five-year (2017–2021) average net withdrawals of 5 Bcf and last year’s net injections of 23 Bcf during the same week. Working natural gas stocks totaled 3,644 Bcf, which is 7 Bcf (less than 1%) lower than the five-year average and 4 Bcf (less than 1%) more than last year at this time.


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