EIA Oil Stocks Preview: Potential for Cushing Draw

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 build by just +0.12mbbls for the week ending 3rd March according to a Bloomberg survey. Crude exports soared last week to a record 5.6mbpd helped by strong overseas demand and a reducing curve contango resulting in less incentive to store oil. The pull for supplies from Europe could reduce slightly this week with the WTI-Brent spread closing in from around -7.0$/bbl on 24 Feb to -5.75$/bbl this week. Production has been holding steady at 12.3mbpd in recent weeks to help the gain in Cushing stocks to their highest since Jun21. AlphaBBL data forecasts the first decline in Cushing stocks for nine weeks with a draw of -2.45mbbls.
• Refinery utilisation is expected to fall again this week by -0.13% to 85.7% due to high outages during the strong refinery maintenance season.
• Gasoline stocks are expected to show a draw of -1.8mbbls and distillates a draw of -0.89mbbls according to a Bloomberg survey. A recent recovery in gasoline implied demand shown by EIA and GasBuddy data as well as lower refinery runs have driven gasoline crack spreads higher over the last couple of weeks. US refiners are increasing gasoline yields ahead of the driving season with yields up to 65% last week and the highest since Nov 2021. A drop in gasoline supplies from Europe according to ship tracking data could negatively impact stocks this week. Diesel cracks have softened with four-week implied distillate demand still below the five-year average.
• EIA data has shown a relatively high inventory adjustment for three consecutive weeks due to oil blending and under-reported oil output. The EIA will change its surveys at some point in the future to get more accurate crude output data and change its accounting methods for crude oil blending.
• The API data released last night showed a draw in crude stocks of -3.8mbbls with a +0.0.24mbbls build at Cushing. Product inventories increased with gasoline showing a build of +1.8mbbls and distillates a build of +1.9bbls.