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US EIA Oil Stocks Preview: Product Builds Expected as Refinery Rates Rise

OIL

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 show a small draw of -0.77mbbls for the week ending 1 December according to a Bloomberg survey. Crude stocks showed a larger than expected build last week with production holding at record levels despite ongoing strong exports and a drop in imports. Cushing stocks have seen a rapid rise back within the previous five-year range from the multi-year lows seen in October. API data suggests another big build this week. The build has helped push the WTI prompt spread into contango while the front month WTI-Brent spread is holding around -4.65$/bbl.
  • US refiners continue to return from maintenance with another increase in utilisation expected in this weeks report by 0.88% according to a Bloomberg survey after a jump up to 89.8% - the highest since mid-September.
  • Total US gasoline stocks are expected to show a build of +1.19mbpd and distillates a build of +1.07mbpd in the week according to a Bloomberg survey. Distillates stocks rose last week driven by a big counter-seasonal drop in distillates implied demand and higher production despite higher exports. Four-week average implied demand fell below the previous five-year range with freight demand consistently lagging supply.
  • Gasoline stocks also built with implied demand drifting lower in line with the seasonal trend and despite higher exports and lower imports on the week. European gasoline arrivals in the US surged to 209kbpd in the week to 30 November, up from the lowest level in seven months the previous week. Demand remains below the five-year average with a disconnect between miles travelled and fuel consumption due to more efficient engines and rising EV according to Bloomberg. OPIS estimate US gasoline implied demand just above 8mbpd as cheaper US pump prices fail to inspire additional consumption. National average gasoline pump prices have declined for 11 straight weeks according to GasBuddy who model US gasoline demand up 2.1% on the previous week at 8.478mbpd.
  • The API data released last night showed a crude build of +0.594mbbls and a big build of +4.3mbbls at Cushing. Gasoline inventories showed a build of +2.8bbls and distillates a build of +1.9mbbls.

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