EIA Oil Stocks Preview: Another Crude Draw & Product Build Expected

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

• Crude inventories are expected to draw -2.99mbbls for the week ending 2nd December according to a Bloomberg survey, following a big draw of -12.6mbbls last week. Last week showed the biggest crude draw since June 2019 with net crude and product exports up to a record high. Gulf Coast stocks are likely to continue declining this week as suppliers try to reduce levels to save on year end tax exposures. The WTI-Brent spread closed in to around 6$/bbl last week as the rate of US SPR releases slows. The last of the planned 180mbbls withdrawals are expected by the end of the year.
• The increase in utilisation is expected to continue again this week after already increasing for five consecutive weeks. Utilisation is well above the average for this time of year with margins still strong despite a slight dip recently. The US 321 crack is just below 27$/bbl compared to start of year levels of around 20$/bbl but down from a peak in October of nearly 45$/bbl. A survey suggests refinery utilization will rise by 0.18% to 95.2%. Refiners continue to maximise distillates output, producing the most since Jan 2020 at 5.31mbpd last week.
• Gasoline and diesel stocks are expected to show builds this week with gasoline up +1.77mbbls and a distillate up +1.65mbbls. Distillate and gasoline have been gradually increasing on the back of the high refinery run rates and despite strong exports. Total US stocks of both distillates and gasoline are at the lower end of the five-year range. However, Central Atlantic (PADD1B) stocks last week fell to the lowest since October 2012.
• Oil demand concerns continue to weigh on crack spreads with weak product supplied data. The four-week implied demand for gasoline fell in line with the seasonal trend while distillate demand fell back below the bottom of the five-year range.
• The API data released last night showed a draw in crude stocks of -6.43mbbls and Cushing unchanged at +0.027mbbls. Gasoline inventories showed a big build of +5.93mbbls and distillate inventories reported a build of +3.55mbbls.