EIA Oil Stocks Preview: Crude and Product Draws 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 by -1.61mbbls for the week ending 31st March according to a Bloomberg survey. Crude inventories last week fell the most since November in only the second draw so far this year as refinery utilisation recovers following the heavy maintenance season. Cushing stocks continue to fall from highs in early March with AlphaBBL expecting another draw this week of -1.75mbbls. The lower Cushing stocks are helping to drive the WTI-Brent spread closer to its tightest spread since December at around -4.2$/bbl this week. The narrowing spread could limit strong US exports seen this year with the front month spread mostly trading between -7$/bbl and -5.5$/bbl in Q1 2023.
• Refinery utilisation is expected to continue to recover with a Bloomberg survey suggesting an increase of +0.24% to 90.5% this week with rates the highest since late last year. Refinery utilisation had seen an extended outage period this year following the cold weather disruption in late December and with maintenance delayed from last year.
• Gasoline stocks are expected to show a draw of -1.91mbbls and distillates a draw of -0.72mbbls according to a Bloomberg survey. Gasoline inventories are reducing as suppliers draw down stocks of winter grade fuel with the transition to lower RVP summer grades. Product imports from Europe could fall with tighter supplies due to the French strikes and Russian sanctions combined with an unexpected shutdown of the gasoline unit at BP’s Rotterdam refinery late last week.
• The four-week diesel and gasoline implied demand both remain below normal with diesel demand at its lowest seasonal level since 2016 last week. Weak demand and refiners returning from maintenance are weighing on the US 321 crack spread which has fallen from a high of 41.9$/bbl on 20 Mar to around 33.8$/bbl today.
• The API data released last night showed a draw in crude stocks of -4.3mbbls and a -1.0mbbls draw at Cushing. Product inventories declined with gasoline showing a drop of -4.0mbbls and distillates a draw of -3.7mbbls.