EIA Oil Stocks Preview: Small Crude Draw and Product Builds 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 draw -0.13mbbls for the week ending 16th December according to a Bloomberg survey, following a large build of 10.2mbbls last week. A surge in imports contributed to towards the big build last week despite strong exports from the Gulf Coast. Exports have remained strong despite recent stormy weather and a reducing WTI discount to Brent. The Brent-WTI has closed in to below -4$/bbl with WTI supported by potential SPR restocking next year and Keystone pipeline disruption. Cushing stocks are expected to show another increase despite the outage to the Keystone oil pipeline which has now been extended for a further week until 28-29 Dec.
• Refinery utilization is expected to recover this week with a Bloomberg survey suggesting an increase of 0.33% to 92.5% after the fall last week. Outages to refineries on the Gulf Coast and West Coast contributed to the decline last week. EIA last week revised up the operable capacity of East Coast refineries by 60kbpd to 878kbpd.
• Gasoline and diesel stocks are expected to show builds this week with gasoline up +1.82mbbls and a distillate up +0.65mbbls. Gasoline stocks built last week with a big jump in imports especially from Europe with US an outlet for gasoline for European refiners as they maximise diesel production. Ship tracking suggests a further increase in US imports from Europe this week. Distillate stocks continue to slowly build but remain below normal levels. Inventories have recovered from critically low levels in November due to high refinery utilisation and weak product demand.
• Weak gasoline and distillate demand continues with data last week showing distillates at the lower end of the five year range and gasoline following the seasonal trend lower and still near 2020 levels. Data could see a recovery after GasBuddy and OPIS both suggested a recovery on weekly gasoline demand.
• The API data released last night showed a draw in crude stocks of -3.1mbbls but a build at Cushing of +0.8mbbls. Gasoline inventories showed a build of +4.5mbbls and distillate inventories reported a build of +3.4mbbls.
• High adjustment figures are increasing the uncertainty over the EIA data. The ‘supply adjustment’ was just below the record high at 2.26mbpd in the data last week.