EIA Oil Stocks Preview: Draws 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 -1.04mbbls for the week ending 7 April according to a Bloomberg survey. Crude stocks drew last week on higher exports and despite higher imports while an unexpected dip in refinery utilisation caused downward pressure. Cushing stocks have fallen from highs in early March and assisted a narrowing of the WTI-Brent spread price. The WTI-Brent spread has narrowed to around -4.2$/bbl this month compared to around -6$/bbl in March and could limit strong US exports seen so far this year. AlphaBBL is expecting a small build at Cushing of 290kbbls this week.
• Refinery utilisation is expected to resume the recovery from the seasonal maintenance with a Bloomberg survey suggesting an increase of +0.35% to 90%. Refinery utilisation saw an unexpected dip in data last week with a drop on the West Coast as units at the Marathon Anacortes refinery started a multi-week maintenance period.
• Gasoline stocks are expected to show a draw of -1.63mbbls and distillates a draw of -0.51mbbls according to a Bloomberg survey. Distillate and gasoline stocks drew last week with lower imports and a drop in refinery runs while implied demand for both products also increased on the week. Imports could remain low after ship tracking suggests US imports of European gasoline last week fell to the lowest in ten weeks.
• US gasoline demand last week resumed the trend higher seen earlier this year to bring the four-week average back above the five-year average, while distillate demand was still low despite also showing an increase. Weak demand and refiners returning from maintenance are weighing on the diesel crack spread which has fallen from a high of 47.4$/bbl on 20 Mar to around 30.5$/bbl today.
• The API data released last night showed a small build in crude stocks of +0.4mbbls but showed a -1.4mbbls draw at Cushing. Gasoline inventories showed a build of +0.5mbbls and distillates a draw of -2.0mbbls.