EIA Oil Preview: Report to Include Missing Data

EIA Oil Inventory Preview: The EIA weekly petroleum status report is scheduled for release at 10:30 EDT (15:30 BST) today. The release should include the missing data from last week for the week ending 17th June as well as the scheduled data for the week ending 24th June.

• Crude inventories are expected to draw by -0.14mbbls for the week to 24th June. The most recent data showed crude stocks still below the bottom of the 5-year range. The trend of high exports and low imports is likely to continue but any increase in production could help to ease the tight stock levels. Limited refining capacity and boosted supplies due to SPR releases look set to push Gulf Coast exports higher with estimations they will reach record levels of 3.3mbpd in the second half of 2022.
• The WTI-Brent spread has been consistently falling since 8th June as concerns for the US economy have suppressed WTI prices relative to Brent resulting in a spread as low as -6.56$/bbl. The average spread last week was -5.43$/bbl which should help to maintain the high crude exports. The last report showed crude inventories at Cushing were at 22.6mbbls compared to a 5-year average of 48.8mbbls. Any further stock draws could help to limit the fall in the WTI-Brent spread. The API data last night showed a draw of -0.65mbbls.
• Product cracks spreads, and especially diesel spreads, have fallen sharply in recent days as risks of an economic slowdown have increased. The tight supply however has not disappeared and even with the price correction, spreads are still higher than at the start of June. Gasoline is expected to show a draw of -0.48mbbls and distillates a draw of -0.43mbbls.
• Despite the price correction the US 321 crack spread is still 150% higher than start of the year levels and should continue to encourage a high refinery utilization rate. However, planned maintenance to refineries on the west coast may have limited any rise in utilization in recent weeks.
• After missing the data last week, the refined product implied demand figures will be closely watched after indications that levels were starting to lag further behind 2019 levels. Any more indications that high prices may be impacting demand could add extra fuel to the product crack spread price correction and put more downward pressure on outright oil prices.
• The API data released last night showed a draw in crude of +3.8mbbls and strong build in the products with +2.85mbbls for gasoline and +2.61mbbls for distillates.