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EIA Oil Stock Preview: Crude Build, Product Draw Expected

OIL

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

  • Crude inventories are expected to build by +1.61mbbls for the week ending 30th September according to a survey, following on from a -0.2mbbls draw last week. Strong overseas demand is likely to be maintained with the front month WTI- Brent spread still around 6.4$/bbl and with falling crude and diesel supplies from Russia to Europe. High product exports have limited the ability to refill the depleted domestic stocks. Crude production has been holding relatively steady in recent months with drillers still maintaining capital discipline over increasing production.
  • The API data released last night showed draws in both total crude and oil products with crude down -1.8mbbls, Cushing up +0.9mbbls, distillates down -4.0mbbls and gasoline down -3.5mbbls.
  • Refinery utilization is expected to fall by 0.43% this week down to 90.2% with US refinery outages increasing again in the week. The BP Toledo outage and lower run rates in European refineries are also leading to tighter supplies in US with data suggesting gasoline imports from Europe falling again this week. Low diesel inventories, the potential for stronger demand in Europe and cold weather risks are likely to support diesel crack spreads.
  • The expectation is for a refined products draw this week at -1.46mbbls for distillates and -1.38mbbsl for gasoline. Gasoline and distillate demand increased slightly last week bringing the 4-week demand back to 2020 levels - but levels are still well below normal. Low stocks and supply disruptions have driven the US 321 crack up from nearly 26$/bbl in mid Sep to 37.2$/bbl. Concerns about a US recession and demand disruption due to Hurricane Ian have limited the upside in refining margins.
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EIA Oil Inventory Preview: The EIA weekly petroleum status report will be released at 10:30 EDT (15:30 BST) today

  • Crude inventories are expected to build by +1.61mbbls for the week ending 30th September according to a survey, following on from a -0.2mbbls draw last week. Strong overseas demand is likely to be maintained with the front month WTI- Brent spread still around 6.4$/bbl and with falling crude and diesel supplies from Russia to Europe. High product exports have limited the ability to refill the depleted domestic stocks. Crude production has been holding relatively steady in recent months with drillers still maintaining capital discipline over increasing production.
  • The API data released last night showed draws in both total crude and oil products with crude down -1.8mbbls, Cushing up +0.9mbbls, distillates down -4.0mbbls and gasoline down -3.5mbbls.
  • Refinery utilization is expected to fall by 0.43% this week down to 90.2% with US refinery outages increasing again in the week. The BP Toledo outage and lower run rates in European refineries are also leading to tighter supplies in US with data suggesting gasoline imports from Europe falling again this week. Low diesel inventories, the potential for stronger demand in Europe and cold weather risks are likely to support diesel crack spreads.
  • The expectation is for a refined products draw this week at -1.46mbbls for distillates and -1.38mbbsl for gasoline. Gasoline and distillate demand increased slightly last week bringing the 4-week demand back to 2020 levels - but levels are still well below normal. Low stocks and supply disruptions have driven the US 321 crack up from nearly 26$/bbl in mid Sep to 37.2$/bbl. Concerns about a US recession and demand disruption due to Hurricane Ian have limited the upside in refining margins.