EIA Stocks Preview: Crude & Product Draws Expected

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

• Crude inventories are expecting a draw of -1.0mbbls for the week ending 26th August according to a survey following on from a -3.3mbbls draw last week. Total oil exports hit a record high of 11.076mbpd last week and strong overseas demand, especially from Europe is likely to be maintained this week. Crude exports dipped off record levels from the previous week but were still over 4mbpd. Crude production unexpectedly fell but the gradual increasing trend could resume this week. SPR levels are now down at the lowest since Jan 1985 with the crude stock release ongoing into October.
• Once again product supplied data will be closely watched with the market still concerned for demand. Low gasoline implied demand last week has weighed on crack spreads after EIA showed 4-week demand back towards 2020 levels again. Data has suggested the peak summer demand has been lower than expected. Diesel cracks have generally been stronger than gasoline as they are supported by high exports and stronger demand, largely reflecting agricultural demand in the Midwest. A survey suggests gasoline inventories are expected to draw by -0.7mbbls and distillates to fall by -0.45mbbls.
• US 321 crack spread has been drifting lower this week. The level should still support strong refinery runs but high refinery outages may limit utilization. Refinery utilization is expected to decrease 0.3% in data this week with outages at BP Whiting Valero McKee offsetting the return of some Gulf coast refineries.
• The API data released last night showed a build in crude of +0.6mbbls, a draw at Cushing of -0.6mbbls and a draw in both distillates and gasoline of -1.7mbbls and -3.4mbbls respectively.