US Daily Oil Summary: Unexpected Crude Stock Build

Crude stocks showed an unexpected build driven by the highest imports since 2018 and drop in exports back to just 3.19mbbls.

• EIA Weekly US Petroleum Summary - w/w change week ending Jun 07: Crude stocks +3,730 vs Exp -886, Crude production +100, SPR stocks +339, Gasoline stocks +2,566 vs Exp +868, Implied mogas demand +94, Distillate stocks +881 vs Exp +1,561, Implied dist demand +282
• US refiners and West Coast traders are flagging crude quality concerns on the recent Trans Mountain expansion – warning high vapor pressure and acidity limits could deter purchases of Canadian heavy crude according to Reuters.
• US crude has dominated global benchmark oil pricing in the year since WTI’s inclusion in the Dated Brent benchmark, Reuters said.
• US crude production for 2024 has been revised up by just 40k b/d to 13.24m b/d, while output is expected to grow by 3.5% between 2024-2025 to 13.71m b/d, according to the EIA’s Short-term Energy Outlook.
• US production is expected to grow slowly until 2030, Founder and Director of Research at Energy Aspects said at the Global Energy Show in Calgary, cited by Bloomberg.
• The Fed held Rates Steady at its June FOMC meeting, signalling Just One Cut in 2024.
• May Core CPI 0.163% M/M (0.3% expected median, 0.28% expected unrounded, 0.3% prior). US MAY CPI 0.0%, CPI Y/Y 3.3%, CORE Y/Y 3.4%.
• Greenback: The USD dollar index is down around 0.4% on the day. Weaker CPI data had caused a sharp fall in the dollar, although it has strengthened slightly following the FOMC meeting where just one rate cut is seen as likely in 2024.