EIA US Oil Stocks Preview: Small Builds Expected

EIA Oil Inventory Preview: The EIA weekly petroleum status report will be released at 11:00 ET (16:00 BST) today.

• Crude inventories are expected to remain almost unchanged from last week with a build of just +0.017mbbls for the week ending 16 June according to a Bloomberg survey. The crude build last week was driven by a large fall in refinery utilisation and despite higher exports with another large increase in the unaccounted oil adjustment. US crude production held at the high of the year at 12.4mbpd but is underestimated based on the monthly data resulting in the positive adjustment according to Kpler. The WTI-Brent spread drifted down to a low of around -4.9$/bbl last week with US recession concerns weighing on WTI although has since recovered higher. Cushing stocks have been building for the last eight weeks since mid-April up to their highest since February with AlphaBBL expecting a very small build of +0.012mbbls this week.
• Refinery utilisation is expected to dip sightly by -0.08% to 93.6% following the unexpected drop last week. The fall in refinery utilisation reflected outages in the week as well as the 240kbpd inclusion of the new Beaumont crude unit.
• Gasoline stocks are expected to show another build of +0.215mbbls and distillates a build of +0.426mbbls according to a Bloomberg survey. US gasoline demand rose 1.8% last week but was still 1.4% below the four-week moving average according to GasBuddy data. EIA data has seen a gradual increase in line with the seasonal trend since April. Distillates weekly implied demand fell again last week as weak demand continues to weigh on oil markets. Refinery outages mainly in Europe have added to diesel supply concerns with crack spreads and time spreads seeing a strong rally in the week.
• Gasoline stocks built last week with strong production despite the lower refinery runs - however PADD 2 gasoline inventories fell to near their lowest level ever recorded. Shipments of gasoline from Europe to the US fell in the week to 15 June after receiving high volumes from Europe, Canada, Saudi Arabia, India and Brazil in early June according to ship tracking data. The strong imports this month have helped to cover the ongoing outage at the Phillips 66 Bayway FCC expected until 6 July while the Colonial Pipeline supply to New York Harbor from Gulf Coast has been fully booked for months.
• The API data released last night showed a crude stock draw of -1.2mbbls with a small +0.05mbbls build at Cushing. Gasoline inventories showed a build of +2.9mbbls and distillates a draw of -0.3mbbls.