EIA Oil Stocks Preview: Small Crude and Product Draws Expected

EIA Oil Inventory Preview: The EIA weekly petroleum status report will be released at 10:30 ET (15:30 BST) today.

• Crude inventories are expected to draw by -0.41mbbls for the week ending 13 October according to a Bloomberg survey. Crude showed a large build last week driven by a large decline in crude exports back to 3.1mbbls, a drop in refinery runs and increase in production. US production rose to a record high of 13.2mbpd in line with the EIA monthly report forecast for an average of 13.16mbpd in Q4. Oil Production in the major US shale oil basins will fall from a revised 9.603mbpd output in October to 9.553mbpdin November according to the EIA Drilling Productivity Report this week. A widening WTI-Brent spread out to about -4.5$/bbl may help support exports after the fall last week.
• Crude stocks at Cushing fell again last week to the lowest since Jul 2022 at 21.8mbbls renewing concern for levels near to minimum operation lows and API data last night suggests a further dip this week.
• Refinery utilization has fallen in recent weeks driven by the seasonal maintenance outages but is expected to hold steady this week at around 85.7% which is the lowest since mid Jan. The biggest crude build last week was on the Gulf with maintenance at Garyville and Baytown refineries. The outages should also support high exports of Canadian crude oil via Texas ports.
• Total US gasoline stocks are expected to show a small draw of -0.24mbbls and distillates a draw of -0.89mbbls according to a Bloomberg survey. Gasoline and distillates both drew last week with an increase in export volumes keeping diesel stocks fairly low. Gasoline also saw a drop in imports to offset an increase in production. US gasoline imports from Europe fell 14% to a four-week low of 174kb/d in the week to 12 Oct according to Bloomberg.
• Weaker than normal four week average gasoline demand is still a concerns despite a small gain last week. Recent GasBuddy data has suggested some demand support amid falling average US gasoline pump prices with Sun-Thu demand last week up 1.9% on the week. Distillate demand last week fell with the four week average back below the five year average.
• The API data released last night showed a crude draw of -4.38mbbls with a draw of -1.0mbbls at Cushing. Gasoline inventories showed a draw of -1.58mbbls and distillates a draw of -0.61mbbls.