EIA US Stocks Preview: Crude Build and Lower Refinery Runs 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 build by 1.35mbbls for the week ending 24th February according to a Bloomberg survey. Commercial crude inventories have seen a gradual increase from around 420mbbls to nearly 480mbbls since December largely due to low refinery runs. Stocks have increased despite strong crude exports with ongoing demand from Europe. The WTI-Brent spread ticked out to nearly -7.0$/bbl to help encourage strong exports again this week. Production levels remain steady but are not growing fast as drillers continue to prioritise capital returns over production growth. Cushing inventories are the highest since Jun 2021 and are expected to gain with AlphaBBL data suggesting a build of +0.127mbbls.
• Refinery utilisation is expected to fall again this week by -0.14% to 85.7 due to high outages during the strong refinery maintenance season. Outages are expected to be higher than normal during this US refinery maintenance season as facilities catch up on maintenance delayed from last year after maximising runs to capitalise on inflated margins.
• Gasoline stocks are expected to show a draw of -0.21mbbls and distillates a draw of -0.07mbbls according to a Bloomberg survey. The drop in refinery utilisation is adding to pressure on the refined product stock levels with US distillates stocks still 12.2% below normal and gasoline stocks just under 5.5% below despite a recent recovery. Low gasoline imports and a recovery in implied demand last week added to the stock draw. EIA monthly revisions of gasoline demand for December showed an upward adjustment from the weekly data. Distillate four week implied demand however remains subdued and below the five year average.
• The API data released last night showed a big build in crude stocks of +6.2mbbls with a +0.48mbbls build at Cushing. Product inventories dipped with gasoline showing a decrease of -1.77mbbls and distillates decreased by -0.34bbls.