EIA Oil Stocks Preview: Cushing Build and Higher Refinery Runs 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 -0.20mbbls for the week ending 27th January according to a Bloomberg survey, following builds over the previous few weeks. The crude stocks have built in the last couple of weeks with high exports, smaller than expected refinery runs and stable production.
• Exports should remain high and supported by high European demand especially with the upcoming EU ban on Russian product supplies from 5 Feb. The WTI-Brent spread has seen a gradual decline during January to as low as -7.00$/bbl at the end of last week. Cushing stocks increased again last week to the highest since Dec 2021, but total Cushing stocks are still 10.6% below the five year average. AlphaBBL data is suggesting a Cushing build of 2.1mbbls this week.
• Refinery utilisation has been slower than expected to recover from the winter disruption in December. Utilisation is expected to increase 0.64% this week to 86.7% but that is still about 5% below the levels seen before the winter disruption.
• Gasoline stocks are expected to show a build of +1.12mbbls and distillates a draw of -1.32mbbls. Imports of both gasoline and diesel increased last week. Ship tracking suggests flows to the New York area from Europe fell to the lowest since 2020 but higher imports from India are helping ease the local tight supply. The four week average gasoline and distillate implied demand is towards the lower end of the five year range as weak demand weighs on US refining margins. The US 321 crack spread traded to the lowest in nearly three weeks at 34.93$/bbl on 31 Jan.
• The API data released last night showed another large build in crude stocks of +6.3mbbls with +2.7mbbls at Cushing. Product inventories also increased with gasoline up by +2.7mbbls and distillates increased by +1.5mbbls.