EIA Oil Stocks Preview: Small Draws & Refinery Run Increase 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 by -0.62mbbls for the week ending 14 April according to a Bloomberg survey. Last week crude stocks built with a slight decline in refinery utilisation and with lower imports and despite a significant drop in exports, down by 2.5mbbls. Exports fell with a narrowing WTI-Brent spread from around -6$/bbl in March to -3.8$/bbl assisted by the declining Cushing stocks. AlphaBBL is expecting another Cushing draw of -967kbbls this week. Crude production remains at the recent high of 12.3mbpd having held at or above 12.2mbpd since the start of the year despite a drop in focused rig counts of 33 or 5% since the end of December.
• Refinery utilisation is expected to resume the recovery from the seasonal maintenance with a Bloomberg survey suggesting an increase of +0.55% to 89.9%. Refinery utilisation has unexpectedly dipped slightly in the last couple of weeks but remains much higher than levels below 86% seen in Jan and Feb. Last week East Coast refinery runs jumped to the highest since early Feb at 87.9% assisting by the restart of Phillips 66 Bayway gasoline unit with consumption expected to increase heading into the driving season.
• Gasoline stocks are expected to show a draw of -1.52mbbls and distillates a draw of -1.08mbbls according to a Bloomberg survey. Gasoline and distillates stocks have declined in recent weeks with lower than expected refinery runs. US has also seen a surge in diesel exports to Europe as the region looks to replenish stocks following the French refinery outages in March and early April. West coast distillates have built to the highest in nearly two years with economic activity under stress from financial markets with tech layoffs and lower agriculture activity. The four week average implied distillates demand remained relatively unchanged last week. Weak demand and refiners returning from maintenance are weighing on the refining margins with the US 321 crack spread falling from a high of 41.9$/bbl on 20 Mar to just over 32$/bbl today.
• Gasoline four week average implied demand rose again to the highest levels since December 2021 and up 5.5% from this time last year and despite a drop on the week. US East Coast gasoline imports from Europe have surged in April according to Vortexa and US exports are declining to the lowest since early 2021 according to Kpler.
• The API data released last night showed a small draw in crude stocks of -2.7mbbls with a -0.55mbbls draw at Cushing. Gasoline inventories showed a draw of -1.0mbbls and distillates a draw of -1.9mbbls.