US EIA Stocks Preview: First Cushing Build in Seven Weeks Expected

EIA Oil Inventory Preview: The EIA weekly petroleum status report will be released at 10:30 ET (15:30 BST) today.

• Crude inventories are expected to draw by -0.17mbbls for the week ending 29 Sep according to a Bloomberg survey. Crude stocks last week showed a larger than expected draw despite a drop in exports and higher imports with a big drop in the crude adjustment figure again. Stocks at Cushing are expected to show the first build in seven weeks which would help ease the concern for levels near to minimum operation lows. AlphaBBL expect a build of 0.45mbbls in the week. The low stocks levels continue to support the front month WTI-Brent up around -3.5$/bbl.
• Refinery utilization last week fell even more than expected amid the seasonal maintenance outages and is expected to decline again by -0.47% to 89% and the lowest since April. US refiners last week raised distillates yield to the highest since mid-June at 30.7%. Diesel margins are much stronger than gasoline with tight global supplies amid a pick up in seasonal demand.
• Diesel and gasoline stocks remain low despite small builds last week. Total US gasoline stocks are expected to show a small build of +0.19mbbls and distillates a small draw of -0.16mbbls according to a Bloomberg survey. Gasoline and distillates stocks unexpectedly gained last week with both showing a drop in exports and slightly higher imports. Gasoline production fell with the drop in refinery runs but distillates production increased slightly on the week. US imports of gasoline from Europe fell by 14% w/w to 329kbpd for the week ended 28 Sep according to Bloomberg.
• Gasoline cracks have trended lower since mid September on weak demand and building stocks after the end of the peak summer season. The front month US 321 refinery margin has fallen to the lowest level since January 2022 losing over 30% of its value in the last month. Gasoline four week average demand fell again last week in line with the seasonal trend and is still near the five year range lows. Despite the recent decline, GasBuddy data this week suggests the weekly US gasoline demand rose 0.9% from last week and was 1.0% above the average of the last four weeks. California Governor this week directed to allow the typically cheaper winter-blend gasoline early before the 31 Oct norm as retail prices rose above 6$/gal. Four week average distillates demand has seen a recovery above the five year average in recent weeks amid a boost in the trucking industry and harvest activity.
• The API data released last night showed a crude draw of -4.21mbbls with a build of +0.705mbbls at Cushing. Gasoline inventories showed a build of +3.946mbbls and distillates a build of +0.349mbbls.