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 BST) today.

• Crude inventories are expected to draw by -2.1 mbbls for the week ending 21 July according to a Bloomberg survey. US crude exports gained in data last week but remain below 4mbpd as the arbitrage for July loading closed - limiting the appeal to Asia refiners according to Bloomberg reports. The WTI-Brent spread has narrowed from around -4.7$/bbl at the start of the month to -4$/bbl. Crude production is holding steady despite the gradual drop in rig counts. Cushing stocks are expected to fall again this week from the peak seen in June after the largest decline since Oct 2021 last week. AlphaBBL is expecting a draw of -2.61mbbls this week.
• Refinery issues have prevented the seasonal distillates stock increase in June due to recent unplanned outages according to IIR Energy. Refinery utilisation however last week recovered back up to 94.3% and is expected to tick up by +0.07% to 94.4% this week.
• Product stocks are expected to show draws of -1.59mbbls for gasoline and -0.82mbbls for distillates according to a Bloomberg survey. Low inventories have been supportive of the rise in cracks spreads this month with distillate stocks at the lowest seasonal level since 2004 while national gasoline stocks are 7.5% below normal with a recent decline in line with the seasonal trend.
• Implied demand in data last week across the three refiner products of gasoline, distillates and jet fuel fell for a second week and now sit just 1% above 2022 levels. The four-week average gasoline demand fell again despite a small increase in the week while the distillates four-week average was down to the lowest seasonal levels since 2009.
• US gasoline pump prices saw the fastest rise in a year last week according to AAA as US gasoline demand rose 0.7% compared to the week prior according to GasBuddy. GasBuddy models US gasoline consumption at 9.0mbpd for the period. US gasoline imports declined as supply from Europe fell to an eight week low - with a decreasing trend observed from Canadian barrels according to Vortexa.
• The API data released last night showed a crude stock build of +1.32mbbls with a draw of -2.34mbbls at Cushing. Gasoline inventories showed a draw of -1.04mbbls and distillates a draw of -1.61mbbls.