EIA Stocks Preview: Another Crude Build and Product Draw 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 +0.51mbbls for the week ending 17 November according to a Bloomberg survey. Crude inventories have increased by 17.5mbbl in the last couple of weeks with production holding up at record levels. The gains are despite ongoing high exports with the WTI-Brent spread widening slightly to -4.65$/bbl this week. Stocks at Cushing have seen a recovery in recent weeks but remain below the seasonal five year range. Inventories are expected to edge higher again this week by +8kbbls according to AlphaBBL following +1.9m build last week. The near term WTI curve is in contango despite the low stocks amid the strong exports with the inclusion of WTI Midland in Dated Brent from earlier this year.
• Refinery utilisation has edged higher as facilities return from maintenance outages but at 86.1% remains below levels of 92.9% seen this time last year. Utilization is this week expected to increase again by 0.70% according to a Bloomberg survey.
• Total US gasoline stocks are expected to show a draw of -0.745mbpd and distillates a draw of -0.862mbpd in the week to Nov 17 according to a Bloomberg survey. Gasoline stocks showed a large decline in the last couple of weeks with a drop in production towards the five year range lows. Exports remain steady while imports are following the seasonal trend lower. US gasoline imports from Europe fell to 151kbpd in the week to 16 November, down from 173kbpd the week prior according to Bloomberg ship-tracking data.
• US distillates stocks have also fallen with relatively low production while both imports and exports remain below normal. US diesel exports to Europe so far in November are however up to 236kbpd, compared with 115kbpd in October. The diesel arbitrage from the US Gulf Coast to Europe has been viable recently although flows are expected to dry up amid low US diesel stocks according to S&P Global.
• Four week gasoline demand was last week holding onto the small gains seen during October while distillates demand is net up in the last two weeks despite a dip in the week to 10 Nov. Weekly US gasoline demand rose 1.3% in week to Nov 18, but was still 1.3% below the average of the last four weeks according to GasBuddy, ahead of an expected boost this week due to Thanksgiving travel.
• The EIA have started including natural gasoline and unfinished oil in the crude oil supply data not product supplied from last week as both are used in crude oil blending.
• The API data released last night showed a crude build of +9.05mbbls with a build of +0.64mbbls at Cushing. Gasoline inventories showed a draw of -1.79bbls and distillates a draw of -3.51mbbls.