EIA Oil Stocks Preview: Crude Build Expected

EIA Oil Inventory Preview: The EIA weekly petroleum status report will be released at 10:30 ET (15:30 GMT) today. The EIA will today release two weeks’ worth of US petroleum data after the delayed release last week due to a planned systems upgrade.

• Crude inventories are expected to build by +4.29mbbls for the week ending 10 November according to a Bloomberg survey. Crude stocks have been supported by record high production and with lower refinery runs during the maintenance season. Refinery utilization is this week expected to increase again by 0.50% according to Bloomberg as refinery runs increase following the outages.
• The front month WTI-Brent spread is holding steady this month at around -4.3$/bbl this week compared to as narrow as -3$/bbl in late Sep and early Oct. The Brent premium continues to support strong US exports which were up at five-year range highs in the week to 27 Oct. Cushing stocks are expected to continue to recover from October lows. Stocks are expected to gain again in the week to 10 Nov by +3mbbls following +1.9m in the week to 3 Nov according to AlphaBBL.
• Total US gasoline stocks are expected to show a build of +1.06mbpd and distillates a draw of -0.74mbpd in the week to 10 Nov according to a Bloomberg survey. Building gasoline stocks in the last couple of months driven by weak demand and steady supply continue to weigh on prices despite a small recovery this month. Atlantic Basin clean product imports fell in October according to Vortexa driven by European flows dropping. US imports of European gasoline fell last week to around 173k b/d according to Bloomberg. Product imports fell as the diesel arb from East of Suez closed, with declining naphtha imports from Algeria while Nigeria’s gasoline subsidy being slashed also contributed to Atlantic Basin weakness.
• The EIA data for the week to 27 Oct showed four-week average gasoline demand still below normal despite a slight recovery during October. Four-week distillates demand was also fairly weak after holding steady compared to the seasonal trend higher. GasBuddy models US gasoline demand for the week ending 11 Nov at 8.42 mbpd, a 4.0% drop from the week prior. The national average gasoline price has declined for its 8th straight week, falling to $3.33/gal.
• The API data released last night showed a crude build of +1.3mbbls with a build of +1.1mbbls at Cushing. Gasoline inventories showed a small build of +0.195bbls and distillates a draw of -1mbbls. API data the previous week showed a big crude build of +11.9mbbls, Cushing build of +1.1mbbl, gasoline draw of -0.4mbbls and distillates a build of +1.0mbbls.