EIA Stocks Preview: Small Draws 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 remain largely unchanged at -0.07mbbls for the week ending 4th November according to a survey, following a draw of -3.1mbbls last week. Crude exports have dipped in the last couple of weeks, but a steady WTI-Brent spread around -7.3$/bbl should continue to encourage strong European demand. Crude production dipped back below 12mbpd last week having stayed around that level since mid June. The latest EIA STEO report forecasts US crude production to increase to 12.31mbpd next year but down from the previous forecast.
• SPR inventories fell below 400mbbls last week. The planned withdrawals to continue until the end of December when stocks will be down at around 380mbbls. Crude inventories at Cushing rose to the highest since April last week due to steady imports from Canada and relatively low PADD 2 refinery utilisation.
• Last week saw a rebound in the refinery utilisation on the reduction in outages as the period of maintenance comes to an end. A survey suggests refinery utilization is expected to increase again this week by 0.42% to 91.0%. Utilisation is supported by a steady increase in the US 321 crack spread over recent weeks from a low in mid Sep of 26.8$/bbl to the current level at 36.8$/bbl.
• Distillate four-week product supplied was last week still up near range highs while gasoline implied demand fell back near 2020 levels. Tight supplies and low stocks are partially offset against the impact of high prices and an economic recession on oil demand growth as cracks remain volatile. East coast tight supplies show no sign of easing with gasoline inventories falling to the lowest since Nov 2014 last week. The expectation is for a refined product draw this week of -0.38mbbls for distillates and -1.3mbbsl for gasoline.
• The API data released last night showed a build in crude stocks of +5.61mbbls and a draw at Cushing of -1.85mbbls. Gasoline inventories showed a build of +2.55mbbls and distillate inventories reported a draw of -1.77mbbls.