EIA Oil Preview: Small Crude Draw Expected Despite Large Drop in API Stocks

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 -0.78 mbbls for the week ending 28 July according to a Bloomberg survey despite the large draw seen in API data yesterday. Crude stocks last week drew with another rise in exports and dip in imports to offset lower production and refinery runs. Gulf Coast utilisation fell to 93.3% and could fall further after a unit outage at Exxon’s Baton Rouge. US refinery utilistaion is expected to drop by -0.17% to 93.2% this week. US refineries are struggling to return to peak utilization rates as high-temperature forecasts could continue to limit refinery gasoline output at the end of the summer driving season according to Macquarie.
• The WTI-Brent spread has held around -4$/bbl since the start of the month supported by the declining stocks at Cushing. AlphaBBL expect another Cushing stocks draw this week of -1.86mbbls.
• Product stocks are expected to show draws of -1.31mbbls for gasoline and -0.27mbbls for distillates according to a Bloomberg survey. Gasoline and distillates stocks drew again last week to keep levels low compared to normal, led by a drop in production with small increases in imports and a drop in exports. Despite the national draw in gasoline, the New York Harbor inventories continued to build due to strong imports. US gasoline arrivals from Europe rose to the highest level in three weeks in the week ending 27 July according to bills of lading and Bloomberg ship tracking data.
• US diesel and gasoil shipments to the EU and UK rose in July to the highest for five years, amid extreme heat and lower refining activity in the Mediterranean paired with supply tightness in northwest Europe according to Vortexa data.
• Data last week showed gasoline four-week implied demand falling for a third week while distillates four-week average demand showed a small recovery from the recent decline. US gasoline demand was last week 1.6% below the four-week average and peak summer demand appears to have peaked according to GasBuddy.
• The API data released last night showed a large crude stock draw of -15.4mbbls with a draw of -1.76mbbls at Cushing. Gasoline inventories showed a draw of -1.68mbbls and distillates a draw of -0.51mbbls.