EIA Weekly Report week ending May 18, 2018
Highlights:
- For the week ending May 18th, US Crude inventories saw a large and unexpected build of 5.8 Mbbls, compared with analysts’ expectations of a 1.6 Mbbls draw and a 1.3 Mbbls draw from API.
- Gasoline inventory built by 1.9 Mbbls, while API reported a 0.980 Mbbls build and analysts expected a 1.4 Mbbls draw.
- Distillate inventory fell by 1.0 Mbbls, which is less than the 1.3 Mbbls draw reported by API.
- Refinery Utilization increased by 0.7% to 91.8%.
- Cushing inventory saw a draw of 1.1 Mbbls.
- Crude Imports increased by 559 kbpd and Exports are lower by 1.5 Mbpd.
- Lower 48 crude production increased 24 kbpd to 10.245 Mbpd.
- Real crude supply is higher by 1.1 Mbpd with a adjustment factor of 217.
- Finished Gasoline production decreased by 410 kbpd to 10.1 Mbpd and Distillate production decreased by 93 kbpd to 4.9 Mbpd.
- Total Product demand is higher WoW by 126 kbpd. Gasoline demand is higher by 158 kbpd and Distillate demand is lower by 585 kbpd.
Our Interpretation:
Bullish = +1
Bearish = -1
Scale = -9 to +9
|
Crude Inventory |
Gasoline Inventory |
Distillate Inventory |
Product Demand |
Product Supply |
Crude Imports |
Crude Exports |
Ref Utilization |
Real Crude Supply |
Bullish/Bearish (+/-) |
|
-1 |
-1 |
0 |
0 |
1 |
-1 |
-1 |
1 |
-1 |
-3 |
- We are bearish on this week’s stats due to a large and unexpected build in crude inventories, lower exports and sharply higher real crude supply. While the export decline is quite large WoW, it is likely a correction from the previously inflated levels from the VLCC and suezmax tanker loadings.
- Distillate demand has dropped for a 3rd consecutive week but remains tight within its 5 year range. Distillate inventory is now below the 5 year range, which is due to high distillate exports (1.5 Mbpd this week, which is 453 kbpd higher YoY) and steady demand levels. Export to Mexico has been consistently higher and marking new records.
- PADD III built quite heavily last week at 3.2 Mbbls yet utilization was 1.6% higher WoW. With crude imports into the region being lower by 329 kbpd, the large build could be explained by the drop in Cushing inventory that is ultimately moved into PADD 3 and ready to be consumed and also exported.
- PADD I also saw a large build WoW, which could be explained by higher crude imports potentially from West Africa. Last week EIA reported their weekly US imports from Nigeria being the lowest point in 2018 (20 kbpd), however on average in 2018, the level of imports from Nigeria have been around 250-300 kbpd. So the rebound in PADD I stock this week can be attributed to a return to normal import levels of Nigerian crude; recall that a few weeks ago West African cargoes were struggling to find buyers and likely saw their prices decline to attractive levels for the US to replenish PADD I stocks and can expect consistent import levels in the coming weeks.
- Lower 48 has once again increased WoW (by 24 kbpd) and this marks the 19th consecutive week that it has increased since the start of the year.
