OIL: Cracks Rally After US Stocks Draw and Demand Recovery

Crude markets are holding onto small earlier gains after a larger than expected draw in US crude inventories according to the update EIA weekly petroleum data. Diesel and gasoline cracks have rallied with unexpected stocks draws amid a recovery in implied demand.

• Crude stocks drew slightly more than expected with a rise in exports and drop in imports offsetting a drop in refinery runs and ongoing production at 13.3mbpd.  The commercial crude draw was partly offset by another 690kbbl injection into the SPR. Cushing stocks fell to the lowest since February. Refinery utilisation fell more than expected to the lowest since May 17 at 91.6% driven primarily by the Gulf Coast and drop in the Midwest on the Joliet outage.
• Gasoline stocks showed a large decline with a recovery in implied demand offsetting higher production on the week. Four week implied demand reverse most of the decline seen the previous week to maintain above the previous five year average.
• Distillates stocks also fell driven by a rise in implied demand, higher exports, and dip in production.  Four week implied demand has risen to just 0.3% below the previous five year average.
  • Brent SEP 24 up 0.4% at 81.3$/bbl
  • WTI SEP 24 up 0.5% at 77.37$/bbl
  • Brent SEP 24-OCT 24 down 0.05$/bbl at 0.89$/bbl
  • Brent DEC 24-DEC 25 down 0.04$/bbl at 3.9$/bbl
  • US gasoline crack up 0.3$/bbl at 23.5$/bbl
  • US ULSD crack up 0.5$/bbl at 25.62$/bbl