EIA Oil Stocks Preview: Crude and Product Draws Expected

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

• Crude inventories are expected to draw by -0.43mbbls for the week ending 6 October according to a Bloomberg survey. Crude stocks fell last week, driven by a drop in imports while exports rose back towards 5mbpd. AlphaBBL expect Cushing stocks to resume the decline by -0.682mbbls this week after seeing a small build the previous week, renewing concern for levels near to minimum operation lows. The low stock levels continue to support the front month WTI-Brent up as high as -3.12$/bbl last week.
• Refinery utilization last week fell even more than expected amid the seasonal maintenance outages and is expected to decline again by -2.42% to 84.9% which would be the lowest since early Jan. Refinery runs saw a bigger than expected decline as refinery rates on the Gulf Coast fell below 90% amid a turnaround at Shell’s Norco refinery. The US 321 crack fell to the lowest since Nov 2021 at 17.65$/bbl, driven by weak gasoline margins, while diesel margins remain at historically robust levels despite a net decline over the last month.
• Total US gasoline stocks are expected to show a small draw of -0.13mbbls and distillates a small draw of -0.71mbbls according to a Bloomberg survey. Gasoline stocks last week showed a draw due to a drop in production to offset higher imports and a further drop in demand as total stocks stay just below the five-year average. Last week, US gasoline demand rose for the third week, by 1.8% from the prior week and was 3.4% above the average of the last four weeks according to GasBuddy data. The increase comes after EIA data for the week to 29 Sep showed the four-week average for US gasoline demand fell to the lowest since mid-February and its weakest for this time of year since 1997. OPIS reports US gasoline demand around the 8.3-8.5mbpd range and said the weak EIA demand last week underestimated real levels by about 250k bpd.
• Americas East Coast gasoline imports fall in line with seasonal trend for the US Atlantic Coast but carry on moving upwards for Latin America according to Kpler. European gasoline arrivals in the US fell by 39% w/w to 202kb/d in the week to 5 Oct, according to Bloomberg.
• Distillates stocks also showed a small draw last week to keep total levels near the five-year range lows. A drop in production and higher exports offset the lower weekly demand. Four-week average implied demand remained relatively unchanged in the week. US diesel exports to Europe in October at their current pace would be the highest monthly level since August 2019, according to Kpler.
• The API data released last night showed a large crude buid of +12.94mbbls with a draw of -0.547mbbls at Cushing. Gasoline inventories showed a build of +3.65mbbls and distillates a draw of -3.54mbbls.