EIA Oil Preview: Product Stocks to Draw Despite Recovering Refinery Runs

EIA Oil Inventory Preview: The EIA weekly petroleum status report will be released at 10:30 ET (14:30 GMT) today.

• Crude inventories are expected to draw by -1.56mbbls for the week ending 17th March according to a Bloomberg survey. Crude inventories built more than expected last week despite a big increase in crude exports and a larger than expected recovery in refinery utilisation with another big change in the unaccounted oil adjustment. The WTI-Brent spread held around -6$/bbl last week to help support strong crude exports again this week. US crude exports to Europe are leaving at a record pace of 2.1mbpd on average so far this month with weak domestic demand and ongoing refinery maintenance. Cushing stocks are falling back from highs in early March with AlphaBBL expecting another decline this week with a draw of -0.57mbbls.
• Refinery utilisation showed a small rise last week and may continue higher this week with the return of refineries from outages. Gulf Coast refineries are coming towards the end of maintenance with rates last week up to the highest since December at 89.1% but East Coast rates were the lowest in a year. The US maintenance season is expected to limit utilisation until mid-April. Refinery utilisation is forecast to increase by +0.43% to 88.6% but still below levels from late last year around 92% or higher.
• Gasoline stocks are expected to show a draw of -1.85mbbls and distillates a draw of -1.70mbbls according to a Bloomberg survey. Product stocks are expected to draw again despite the recovery in refinery runs - potentially due to higher exports and lower imports. The US is unusually exporting diesel to Europe and gasoline imports from Europe are the lowest since Feb 2022 according to Vortexa.
• Gasoline margins continue to rally supported by the ongoing rebound in US gasoline demand ahead of the summer driving season. US gasoline demand rose 3.0% last week from the prior week to the highest since early December according to GasBuddy data. The US 321 crack spread reached a high of nearly 42$/bbl on 20 March compared to a low of below 30$/bbl in February. Diesel spreads have found some support this week with potential for tighter global supplies due to French strike disruption, an expected reduction in China diesel exports in March and with ongoing uncertainty over future Russian supplies.
• The API data released last night showed a build in crude stocks of +3.26mbbls and a -0.76mbbls draw at Cushing. Product inventories declined with gasoline showing a drop of -1.09mbbls and distillates a draw of -1.83bbls.