EIA Stocks Preview: Draws Expected with Higher Refinery Utilisation

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 -1.06mbbls for the week ending 21 April according to a Bloomberg survey. Crude stocks declined more than expected last week with a large increase in refinery utilisation and with a recovery in exports after the dip the previous week. Cushing stocks drew for the seventh consecutive week to help narrow the WTI-Brent spread further. The closing WTI-Brent spread from around -6$/bbl in March to -3.4$/bbl could start to limit export flows. AlphaBBL is expecting a small build at Cushing of +144kbbls this week.
• Refinery utilisation is expected to continue the trend higher following the seasonal maintenance with a Bloomberg survey suggesting an increase of +0.39% to 91.4%. This utilisation would be the highest since 23 Dec before the winter weather disruption and maintenance outages.
• Gasoline stocks are expected to show a draw of -1.13mbbls and distillates a draw of -0.98mbbls according to a Bloomberg survey. Gasoline stocks on the East Coast last week recovered from a record seasonal low due to higher imports and with the Colonial pipeline fully allocated and supplied. Gasoline and blending component imports into New York are set to reach the highest since June according to Kpler data although imports dropped 69% in the week to 20 April from a seven month high the previous week according to Bloomberg. Cargoes arriving from Europe after the end of the French strikes as well as the Middle East, Asia and Canada have boosted supplies. Inventories however remain low ahead of the US summer driving season with in PADD 1B Central Atlantic stocks just over 20% below the five-year average.
• Distillates stocks extended a decline last week despite higher refinery output with slightly higher imports and steady exports. Weak demand and refiners returning from maintenance continue to weigh on refining margins with the US 321 crack spread falling from a high of 41.9$/bbl on 20 Mar to around 28.5$/bbl today. Gasoline and distillates four-week average implied demand both dipped last week after seeing a slight recovery in previous weeks.
• The API data released last night showed a draw in crude stocks of -6.08mbbls but a small +0.465mbbls build at Cushing. Gasoline inventories showed a draw of -1.92mbbls and distillates a build of +1.70mbbls.