EIA Oil Stocks Preview: Further Crude and Cushing 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 -2.35mbbls for the week ending 1 Sep according to a Bloomberg survey. Crude inventories last week saw a big fall to the lowest since December driven by a decline in Gulf Coast stocks. US crude imports fell while exports were up modestly on the week and production held at the highest since Mar 2020. Crude inventories were last week enough to meet 25.4 days of crude demand according to Bloomberg but could start building soon amid the upcoming refinery maintenance season. Cushing stocks are expected to fall again this week with AlphaBBL expecting a draw of -1.81mbbls which would be the lowest of the year so far.
• Midwest refinery runs last week rose to the highest since Aug 2019 at 100.7% of capacity supported by strong margins in August. The US 321 front month crack spread has however since fallen from nearly 40$/bbl on 25 Aug back to 30.5$/bbl at the end of last week. PADD 3 runs saw a decline last week due to the outage at Garyville which could still impact data this week as the refinery returned to normal operations on 31 August.
• Product stocks are expected to show a draw of -0.90mbbls for gasoline and a build of +0.21mbbls for distillates according to a Bloomberg survey. Low US refined product inventories continue to provide support to cracks with a limited boost expected during the refinery maintenance period in Sep and Oct. US distillates were last week about 15% below normal and gasoline 5% below. The US gasoline crack has however fallen to the lowest since early July this week on the expectation of lower demand as the US Labor Day holiday marked the end of the summer driving season. European gasoline arrivals in the US fell by 36% w/w to 318kb/d in the week to 31 Aug according to ship tracking data.
• Implied four-week average gasoline demand last week showed a small gain for the first time in three weeks while distillates demand edged lower on the week. US weekly gasoline demand including the start of Labor Day weekend increased by just 0.2% from the week prior to 8.88mbpd according to GasBuddy. EIA data could show a much lower number than this due to stations pre-filling according to GasBuddy.
• The API data released last night showed a crude draw of -5.5mbbls with a draw of -1.35mbbls at Cushing. Gasoline inventories showed a big draw of -5.1mbbls and distillates a small build of +0.3mbbls.