EIA US Stocks Preview: Crude Build and Product Draw 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 draw by -0.74mbbls for the week ending May 12 according to a Bloomberg survey. A recent build in crude stocks is expected to continue this week. The WTI-Brent spread is hovering around -4$/bbl compared to levels at -6$/bbl or wider which supported strong exports to Europe during Q1 2023. Cushing stocks unexpectedly increased again last week to bring inventories to the highest since March. AlphaBBL is expecting Cushing stocks to show a small build of +397kbbls this week.
• Refinery utilisation is expected to continue its trend higher with a Bloomberg survey suggesting an increase of +0.68% to 91.7% - which would be the highest since late December. Refiners continue to use more feedstocks like fuel oil as an alternative to crude to make products due to pressure from lower margins.
• Gasoline stocks are expected to show a draw of -1.94mbbls and distillates a draw of -0.68mbbls according to a Bloomberg survey. Draws again this week would push inventories even further below the five-year average with healthy exports and falling imports expected. US gasoline imports from Europe fell by 48% in the week according to ship tracking data. Diesel exports to Europe are still supported by weak transatlantic freight rates.
• GasBuddy data suggests US gasoline demand has held steady in recent weeks with the latest weekly data flat versus the four-week average. EIA data last week showed a small recovery higher in the four-week implied demand for both gasoline and distillates which added to weekly stock draws. Gasoline demand is not yet seeing a strong seasonal boost heading into the US summer driving season.
• The API data released last night showed a build in crude stocks of +3.69mbbls with a +2.87mbbls build at Cushing. Gasoline inventories showed a draw of -2.46mbbls and distillates a draw of -0.89mbbls.