Out of (and into) Africa
- Massive new entrant into Atlantic Basin petroleum market arrives
- Increased refined product supply now available for North American buyers
- WTI crude oil demand also now affected
- Weather effects receding while LNG feedgas demand ramps up
Sincerely,
David Thompson, CMT
Executive Vice President
Powerhouse
(202) 333-5380
The Matrix
The last week in August saw an important milestone reached. Nigeria’s Dangote refinery sent its first cargo of refined products to North America. A tanker carrying 300,000 barrels of gasoline embarked for New York Harbor. The mega-refinery with a nameplate refining capacity of 650,000 barrels/day (bpd) is a game-changer for the Atlantic Basin petroleum market.
Nigeria’s domestic gasoline demand is estimate at roughly 300,000 bpd. Even if Dangote supplied all of those volumes, several hundreds of thousands of barrels per day of refined products would be available for export. “We sell our products to those who are willing to give us the highest price. It’s the buyer’s right to take the products to any destination of their choice,” a spokesperson for the Dangote refinery told Reuters.
The US imported approximately 630,000 bpd of gasoline in the second quarter of 2025. The top three suppliers were the Netherlands (24%), Canada (17%) and India (11%). Expect to see Nigeria appearing in these rankings soon.
Petroleum trade flows are also ramping up in the reverse direction. The chart below shows the Dangote refinery’s increasing appetite for WTI Midland crude oil. The importance of this newer source of demand for U.S. crude oil is multi-faceted. As it becomes established in the market’s expectations, any reduction in demand can be a bearish influence on price, such as the multi-week refinery repairs announced recently by Dangote.
Additional reliable supply into New York Harbor has important ramifications for marketers. It might help to moderate basis spikes for example. Many years in the making, the entrance of this massive new refining complex into the Atlantic Basin is another prime example of how energy markets continually develop and change.
Supply/Demand Balances
Supply/demand data in the United States for the week ended September 5, 2025, were released by the Energy Information Administration.
Total commercial stocks of petroleum increased (⬆) 15.4 million barrels to 1.2813 billion barrels during the week ended September 5th, 2025.
Commercial crude oil supplies in the United States were higher (⬆) by 3.9 million barrels from the previous report week to 424.6 million barrels.
Crude oil inventory changes by PAD District:
PADD 1: Down (⬇) 0.5 million barrels to 7.2 million barrels
PADD 2: Down (⬇) 1.7 million barrels to 104.1 million barrels
PADD 3: Up (⬆) 5.5 million barrels to 244.9 million barrels
PADD 4: Up (⬆) 0.4 million barrels to 22.6 million barrels
PADD 5: Up (⬆) 0.3 million barrels 45.3 million barrels
Cushing, Oklahoma, inventories were down (⬇) 0.3 million barrels to 23.9 million barrels.
Domestic crude oil production increased (⬆) 72,000 barrels per day from the previous report at 13.495 million barrels per day.
Crude oil imports averaged 6.271 million barrels per day, a daily decrease (⬇) of 471,000 barrels. Exports decreased (⬇) 1,139,000 barrels daily to 2.745 million barrels per day.
Refineries used 94.9% of capacity; an increase (⬆) of 0.6% from the previous report week.
Crude oil inputs to refineries decreased (⬇) 51,000 barrels daily; there were 16.818 million barrels per day of crude oil run to facilities. Gross inputs, which include blending stocks, increased (⬆) 110,000 barrels daily to 17.230 million barrels daily.
Total petroleum product inventories increased (⬆) by 11.6 million barrels from the previous report week, up to 856.7 million barrels.
Total product demand decreased (⬇) 871,000 barrels daily to 19.781 million barrels per day.
Gasoline stocks increased (⬆) 1.5 million barrels from the previous report week; total stocks are 220.0 million barrels.
Demand for gasoline decreased (⬇) 609,000 barrels per day to 8.508 million barrels per day.
Distillate fuel oil stocks increased (⬆) 4.7 million barrels from the previous report week; distillate stocks are at 120.6 million barrels. EIA reported national distillate demand at 3.377 million barrels per day during the report week, a decrease (⬇) of 391,000 barrels daily.
Propane stocks rose (⬆) 1.5 million barrels from the previous report to 97.6 million barrels. The report estimated current demand at 867,000 barrels per day, an increase (⬆) of 161,000 barrels daily from the previous report week.
Natural Gas
The price effects of the coolest August-September period in more the 10 years are starting to ebb from the natural gas futures market. Moderate demand allowed inventories to build. However, while U.S. natural gas inventories are 6% above the 5-year average, they are 2% below the same time last year. LNG exports reached a near
record level in August, and one bank expects 2026 LNG export growth to come in at +3.3 bcf/d, year over year.
The bank also forecasts Henry Hub prices to top $5 in the first half of 2026, nearly 30% above the current futures strip.
According to the EIA:
- Net injections into storage totaled 71 Bcf for the week ended September 5, compared with the five-year (2020–24) average net injections of 56 Bcf and last year’s net injections of 36 Bcf during the same week. Working natural gas stocks totaled 3,343 Bcf, which is 188 Bcf (6%) more than the five-year average and 38 Bcf (1%) lower than last year at this time.
- According to The Desk survey of natural gas analysts, estimates of the weekly net change to working natural gas stocks ranged from net injections of 59 Bcf to 80 Bcf, with a median estimate of 69 Bcf.
- The average rate of injections into storage is 19% higher than the five-year average so far in the refill season (April through October). If the rate of injections into storage matched the five-year average of 10.7 Bcf/d for the remainder of the refill season, the total inventory would be 3,941 Bcf on October 31, which is 188 Bcf higher than the five-year average of 3,753 Bcf for that time of year.
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