EIA US Stocks Preview: Small Draws Expected

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

• Crude inventories are expected to draw -0.94mbbls for the week ending 23rd December according to a Bloomberg survey, following a draw of -5.9mbbls last week. Crude inventories fell last week with the biggest draw on the Gulf Coast with the Keystone pipeline outage and stock reductions to limit end of year tax. The Keystone segment to Cushing was last week expected to resume around 29 Dec. The Brent-WTI closed in to -3.3$/bbl last week with WTI supported by potential SPR restocking next year and Keystone pipeline disruption. The spread has since pulled back to around -4.4$/bbl. Cushing stocks were last week still 43% below the five year average despite a slight increase in recent weeks.
• Refinery utilization is expected to decline further with a Bloomberg survey suggesting a fall of -1.16% to 89.7%. Refinery utilisation was as high as 95.5% at the start of December. Outages to refineries on the Gulf Coast and West Coast and the winter freeze has reduced available US refining capacity.
• Gasoline and diesel stocks are expected to show draws with gasoline down -0.32mbbls and a distillate down -2.18mbbls. The decline in refinery utilisation may impact refined product stocks although imports of gasoline from Europe are likely to continue as it focuses on diesel.
• Weak gasoline and distillate demand continues despite a slight tick higher in the data last week. US product crack spreads have trended higher over the last two weeks with the reduction in refinery utilisation offsetting the weak demand.
• The API data released last night showed a draw in crude stocks of -1.3mbbls and a draw at Cushing of -0.3mbbls. Gasoline inventories showed a build of +0.5mbbls and distillate inventories reported a build of +0.4mbbls.