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Americas Daily Oil Summary: US Stock Builds Could Cut Refinery Runs

OIL
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US oil refineries have been processing oil at the fastest seasonal rate since the pandemic but rising fuel inventories have begun to weigh on crack spreads, likely signalling a slowdown to come, Reuters said.

  • Inventories cannot continue building at current rates without adding downside pressure to margins and prices, Reuters said.
  • The Trans Mountain pipeline is running around 80% capacity, as 22 oil tankers are scheduled to load in Vancouver in June with crude from the expanded pipeline, Trans Mountain said cited by Reuters.
  • Crude loadings from Guyana are planned at 20m bbl, or 645k b/d in August, according to a loading programme seen by Bloomberg. This compares to 419k b/d in July, which was the lowest level since November amid ongoing seasonal maintenance.
  • USD: The greenback has recovered from the post-FOMC reversal as today's softer PPI and higher weekly claims rekindled 50bp in rate cut pricing by year end.
  • May's producer price data came in much softer than expected across most categories, with the headline PPI index (final demand) falling 0.25% M/M from +0.52% prior (unrevised), and vs +0.1% consensus.
  • The latest weekly jobless claims report was weaker than expected, with initial claims rising 13k in the June 8 week to 242k (vs expectations of a 4k drop to 225k). Continuing claims rose much more than expected as well in the June 1 week, to 1,820k.
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US oil refineries have been processing oil at the fastest seasonal rate since the pandemic but rising fuel inventories have begun to weigh on crack spreads, likely signalling a slowdown to come, Reuters said.

  • Inventories cannot continue building at current rates without adding downside pressure to margins and prices, Reuters said.
  • The Trans Mountain pipeline is running around 80% capacity, as 22 oil tankers are scheduled to load in Vancouver in June with crude from the expanded pipeline, Trans Mountain said cited by Reuters.
  • Crude loadings from Guyana are planned at 20m bbl, or 645k b/d in August, according to a loading programme seen by Bloomberg. This compares to 419k b/d in July, which was the lowest level since November amid ongoing seasonal maintenance.
  • USD: The greenback has recovered from the post-FOMC reversal as today's softer PPI and higher weekly claims rekindled 50bp in rate cut pricing by year end.
  • May's producer price data came in much softer than expected across most categories, with the headline PPI index (final demand) falling 0.25% M/M from +0.52% prior (unrevised), and vs +0.1% consensus.
  • The latest weekly jobless claims report was weaker than expected, with initial claims rising 13k in the June 8 week to 242k (vs expectations of a 4k drop to 225k). Continuing claims rose much more than expected as well in the June 1 week, to 1,820k.