EIA Oil Stocks Preview: Slow  Recovery in Ref Runs Expected After Cold

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 draw of -0.225mbbl for the week ending 26 January according to a Bloomberg survey. Crude inventories fell more than expected last week driven by large drop in production and refinery utilisation due to the severe cold weather across the US in mid Jan. Cushing stocks showed another draw amid the large drop in North Dakota output, but production has since recovered to a disruption of just 10-40kbpd as of Jan 29 according to the pipeline authority. Refinery utilisation fell the most since Dec 2022 to the lowest since early November down to 85.5% driven by large declines in the Gulf Coast region. Refinery utilisation is expected to recover slightly by 1.5% this week although could be slow to recover ahead of the expected heavy maintenance season.
• US oil refiners are looking to maximize diesel production at the expense of gasoline according to Bloomberg amid a demand boost for diesel over the winter. Higher diesel yields are encouraged with distillates margins more than double those for gasoline due to firm demand and low inventories according to Valero Energy.
• Total US gasoline stocks are expected to build again this week by +2.34mbbl and distillates to draw by -0.35mbbl according to a Bloomberg survey. Gasoline stocks showed a large build last week with a drop in both exports and demand despite production falling to the lowest since Feb 2021. Four-week average implied demand fell back below the previous five year range.US gasoline demand was still 0.4% below the four-week average in the week to Jan 27 despite rising by 2.9% from the previous week to above 8mbpd according to GasBuddy. Two tankers carrying more than 140k tons of US gasoline are headed for Asia-Pacific markets in a rare trade flow according to Kpler data.
• Distillates inventories last week fell with a drop in production while implied demand edged higher on the week. Four-week implied demand was still below the low end of the previous five year range. US Gulf Coast diesel exports to Europe are on track for a Jan record with 300kbpd so far this month according to Kpler – helping to cover declining supply from the Middle East.
• The API data released last night showed a crude draw of -2.49mbbl with a draw of -2.00mbbl at Cushing. Gasoline inventories showed a small build of +0.58mbbl while distillates stocks fell by -2.13mbbl.