EIA Stocks Preview:  Gasoline Could Draw Again but Crude Expected to Build

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 +0.93mbbls for the week ending May 19 according to a Bloomberg survey. Crude stocks built last week with an increase in imports offsetting higher than expected refinery runs, high exports and drop in production. The large crude build was partly offset by the SPR withdrawals with another 1.6mbbls again seen this week. The WTI-Brent spread has narrowed slightly in to around -3.85$/bbl at the end of last week. Cushing stocks last week increased to their highest since March and AlphaBBL is expecting another build of +2.05mbbls this week.
• Refinery utilisation is expected to continue its trend higher with a Bloomberg survey suggesting an increase of +0.69% to the highest since early December at 92.7%.
• Gasoline stocks are expected to show a draw of -1.17mbbls and distillates a small build of +0.32mbbls according to a Bloomberg survey. Gasoline stocks were last week below the five-year range with high exports limiting any build ahead of the US summer driving season. Ship tracking suggests gasoline flows from Europe to the US last week surged to the highest since 13 April with a wide arbitrage supported by low stocks and cheap freight. EIA data last week showed gasoline four-week average demand picking up slightly but still at the low end of the five-year range, excluding 2020. The latest GasBuddy data showed US gasoline demand up by 1.2% on the week and just below the highest of the year so far.
• Distillate inventories are expected to remain relatively unchanged again this week amid weak demand as diesel cracks remain subdued. Demand concerns and the threat of a US recession combined with strong global supplies and recovering refinery run rates so far this year are weighing on the spreads. US Gulf Coast diesel supplies to Europe jumped higher in April amid competition from Russia for US supplies to Latin America and assisted by cheap transatlantic freight rates.
• The API data released last night showed a draw in crude stocks of -6.8mbbls with a +1.7mbbls build at Cushing. Gasoline inventories showed a large draw of -6.4mbbls and distillates a draw of -1.8mbbls.