EIA Oil Stocks Preview: Crude Unchanged and Small Product Draws Expected

EIA Oil Inventory Preview: The EIA weekly petroleum status report will be released at 10:30 ET (14:30 GMT) today

• Crude inventories are expected to remain largely unchanged at +0.08mbbls for the week ending 28th October according to a survey, following a build of 2.588mbbls last week. Crude exports last week reached a new weekly high above 5.1mbpd with overall exports up to a new peak at 11.4mbpd. Some urge caution that the numbers could be overstated with EIA’s adjustment factor also at a new weekly record. The WTI-Brent spread has closed in slightly from around -8.5$/bbl to -7.5$/bbl but strong demand from Europe should maintain high exports although not necessarily as high as last week. Crude production has held steady since mid-June at around 12mbpd.
• Refinery runs have reduced over recent weeks due to refinery outages, but utilisation rates are expected to increase this week with units gradually returning from seasonal maintenance. A survey suggests refinery utilization is expected to increase by 0.4% to 89.3%.
• Refined product supplies remain tight and especially low in US PADD 1B (Central Atlantic) and 1A (New England) due to limited refining capacity and pipeline capacity from the Gulf Coast running at maximum. Overall US distillate stocks are just over 20% below normal but PADD 1B stocks are over 52% below normal. Distillate product supplied surged during October but eased back slightly last week. Diesel cracks remain elevated compared to start of year levels, but future demand concerns have weighed on the spreads over the last couple of weeks. Gasoline cracks are softer than diesel with stocks not as low, but high exports and lower refinery runs have supported prices over the last couple of months. The expectation is for a refined product draw this week of -0.22mbbls for distillates and -0.60mbbsl for gasoline.
• The API data released last night showed a draw in crude stocks of -6.53mbbls and a build at Cushing of +0.88mbbls. Gasoline inventories showed a draw of -2.64mbbls and distillate inventories reported a build of 0.865mbbls.