EIA Oil Preview:  Crude Draw, Product Builds Expected on High Ref Runs

EIA Oil Inventory Preview: The EIA weekly petroleum status report will be released at 10:30 ET (15:30 BST) today.

• Crude inventories are expected to draw by -1.11mbbls for the week ending 9 June according to a Bloomberg survey. Crude inventories drew last week after a large increase in refinery utilisation and a drop in imports offsetting an increase in production and a big drop in exports. Production increased above the range seen in the last seven months. The WTI-Brent spread has drifted lower this week to a low of around -4.85$/bbl with US recession concerns weighing on WTI. Cushing stocks have been trending higher since mid-April, up to their highest since February last week while AlphaBBL is expecting another build of +1.7mbbls this week.
• Refinery utilisation is expected to hold steady after trending higher since the start of the year. Utilisation is expected to hold flat at - 0.02% to 95.8% following on from the big increase last week. Gulf Coast refineries operated at the highest since Dec 2018 at 98.8%.
• Gasoline stocks are expected to show another build of +1.02mbbls and distillates a build of +2.02mbbls according to a Bloomberg survey. Refining margins are seeing some support from low US inventories, the potential demand boost from the summer driving season combined with strong demand from India and a dip in Russian diesel exports. Refinery outages to a CDU at Shell’s Pernis refinery and the Phillips 66 Bayway FCC have added to supply concerns although the impact may mostly start to impact data released next week. Distillate stocks last week built due to higher production and a drop in exports while the four-week implied demand fell again despite a small weekly gain.
• Gasoline stocks remain at the bottom of the five-year range despite a build last week - led by higher production and higher imports. Gasoline imports to the US East Coast have risen to a three year high this month according to Kpler with higher imports from Europe, Canada, Saudi Arabia and India. The EIA data last week suggested the four-week average gasoline demand was holding steady above last year but below 2019 levels at the start of the summer driving season. Demand fell -2.3% last week and was -4.2% below the four-week moving average according to GasBuddy data.
• The API data released last night showed crude stocks build of +1.024mbbls with a +1.502mbbls build at Cushing. Gasoline inventories showed a build of +2.075mbbls and distillates a build of +1.394mbbls.