EIA Stocks Preview: Crude and Cushing 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 -2.87mbbls for the week ending 18 Aug according to a Bloomberg survey. Crude inventories fell last week mainly from the Gulf Coast region with a recovery in exports which jumped by more than 90% and despite production rising to the highest March 2020 to 12.7mbpd. Cushing stocks are expected to fall again this week with AlphaBBL expecting a big draw of -3.5mbbls which would be the lowest stock level since January.
• US oil refinery processing rates increased more than expected last week although gasoline and diesel production fell on the week. Oil processed by refineries last week reached the highest since Jan 2020 before the pandemic. Distillates yields fell to the lowest since 2018 to 28% last week.
• Product stocks are expected to show a draw of -0.72mbbls for gasoline and a build of +0.57mbbls for distillates according to a Bloomberg survey. Low inventories continue to support margins with total US distillates last week 16.7% below normal and gasoline 6.4% below. European gasoline arrivals in the US slipped by 11% w/w in the week to 17 Aug, according to bills of lading and ship-tracking data compiled by Bloomberg.
• US fuel demand continues to disappoint with gasoline consumption below the five year seasonal average. Weekly US gasoline demand was down by 1.4% w/w to 8.92mbpd for the week ended August 12 according to GasBuddy. Gasoline demand in the US typically falls through August with the exception of the Labor Day weekend as the US summer driving season unwinds. The recovery in implied distillates demand stalled last week after recovering from a low in mid July.
• The API data released last night showed a crude draw of -2.4mbbls with a draw of -2.1mbbls at Cushing. Gasoline inventories showed a build of +1.9mbbls and distillates a small draw of -0.15mbbls.