EIA Oil Stocks Preview: Small Crude and Product Build 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 build by 2.03mbbls for the week ending 4th February according to a Bloomberg survey following builds over the previous few weeks. Crude stocks have built recently due to steady production and increased imports despite lower-than-expected refinery runs. Exports should remain high, supported by the WTI-Brent spread which has been bouncing between -4.88$/bbl and -7.71$/bbl in the last couple of weeks. Cushing stocks are expected to increase again which would be the sixth consecutive weekly gain. AlphaBBL data is suggesting a Cushing build of 0.83mbbls.
• Refinery utilisation unexpectedly dipped last week with refineries not fully back from winter disruption before entering the refinery maintenance season. East Coast utilisation dropped from 97.1% to 91% possibly due to a three-day outage at Phillips 66 Bayway refinery during the previous week which could recover this week. Utilisation is expected to increase 0.8% to 86.5% but that is still well below levels over 92% seen before the winter disruption in December.
• Gasoline stocks are expected to show a build of +0.72mbbls and distillates a build of +0.31mbbls. Gasoline and distillate stocks built last week due to high imports and low demand, but inventories remain well below the five-year range. Gasoline shipments to the US have increased with higher product flows from India and a surge in imports from Europe according to ship tracking data this week. Gasoline supplies in the New York Harbour area have eased slightly but remain tight with stocks still at their lowest for ten years.
• The four-week average implied demand did increase in the data last week but remains at the lower end of the five-year range as refining margins extended a decline. The US 321 crack spread is recovering slightly after falling from a high of 42.8$/bbl on 25 Jan to a low of 29.03 on 6 Jan.
• The API data released last night showed an unexpected draw in crude stocks of -2.2mbbls with a +0.2mbbls build at Cushing. Product inventories also increased with gasoline showing a large increase of +5.3 mbbls and distillates increased by +1.1bbls.