EIA Oil Stocks Preview: Crude and Product Draws Expected

EIA Oil Inventory Preview: The EIA weekly petroleum status report will be released at 11:00 EDT (16:00 BST) today

• Crude inventories are expected to draw by -0.67mbbls for the week ending September 2 according to a survey following on from a -3.3mbbls draw last week. Crude exports have dipped recently but are expected to remain well above normal due to strong overseas demand. The WTI-Brent spread widened towards the end of August but has mostly traded between approximately 6$/bbl and 7$/bbl and should encourage exports to Europe. Withdrawals continue from the strategic reserves with SPR levels down to their lowest since 1984 at just 450mbbls. The SPR release is expected to continue until at least October with stocks falling to approximately 380mbbls.
• Lower crude imports and refinery utilization last week were linked to the shutdown of BP’s Whiting refinery. The refinery was back in service last weekend, but the outage is still likely to have an impact on today’s data. The US 321 crack spread has continued to edge lower but remains 60% above start of year levels and supports healthy runs rates despite high outages. Refinery utilization is expected to dip slightly by 0.17% to 92.5%.
• Gasoline demand has shown no signs of improvement as we reach the end of the summer driving season. Last week also saw a fall in distillate demand with market concerns driving margins lower since mid Aug. A survey suggests gasoline inventories are expected to draw by -1.85mbbls and distillates to fall by -0.1mbbls. Product draws would add to the demand concerns - although the low distillate stock levels will keep diesel stronger than gasoline.
• The API data released last night showed a build in crude of +3.6mbbls, a draw at Cushing of -0.8mbbls and a draw in gasoline of -0.8mbbls and a build in distillates +1.8mbbls.