EIA Oil Stocks Preview: Refinery Runs Expected to Start Recovery

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 show a build of +2.56mbbl for the week ending Feb. 23, according to a Bloomberg survey. US crude stocks built less than expected last week with a rise in exports back towards 5mb/d, while production held at record levels and refinery utilisation remained unchanged on the week due to ongoing outages.
• Refinery utilisation was still low with West Coast runs at their lowest since Jan last year, although the start of a recovery is expected in today’s data. Refinery utilisation is expected to increase 1.22% w/w according to a Bloomberg survey. IIR Energy expect capacity to increase by 431kbpd w/w to Feb. 23, cutting offline capacity to 1.8mb/d.
• Total US gasoline stocks are expected to draw by -2.35mbbl and distillates to draw by -2.39mbbl, according to a Bloomberg survey. Distillates inventories last week fell for the fifth straight week after an increase in implied demand more than offsetting higher imports. Four-week average implied demand rose to just below the previous five year average but was still 8.7% below normal for the time of year. European imports of US diesel so far this month declined to 6.65mbbls from 11.44mbbls according to Kpler data, driven by prolonged outages including at the Whiting refinery, that is scheduled to fully restart in March.
• Gasoline stocks edged lower last week due to a drop in production set against higher imports. Weekly implied demand ticked higher as the four-week average remains 3.1% below the five-year average. OPIS sees growing but lacklustre US gasoline demand at about 8.4mbpd last week. US gasoline demand increased 2.2% in the week to Feb.25 to 8.572mbpd according to GasBuddy. US gasoline margins have risen to their highest since August with support from unplanned refinery outages combined with a heavy maintenance season. US West Coast gasoline imports will almost triple to 24kb/d in February compared to 9kb/d in January according to Kpler. European gasoline is “currently enjoying an unseasonably robust position,” curbing the region’s exports to US PADD 1 according to Sparta Commodities.
• The API data released last night showed a large crude build of +8.4mbbl, with a build of 1.8mbbl at Cushing. Gasoline inventories showed a draw of -3.3mbbl while distillates stocks fell by -0.5mbbl.