EIA Weekly Report week ending August 17, 2018
Highlights:
- For the week ending August 17, US Crude inventories saw a draw of 5.8 Mbbls, compared with analysts’ expectations of a 1.5 Mbbls draw and a 5.2 Mbbls draw from API.
- Gasoline inventory built by 1.2 Mbbls, compared with API reporting a draw of 0.930 Mbbls while analysts expected gasoline to draw 0.488 Mbbls.
- Distillate inventory built by 1.9 Mbbls, compared with analyst expectations of 1.5 Mbbls build while API reported a 1.8 Mbbls build.
- Refinery Utilization is unchanged at 98.1%.
- Cushing inventory saw a build of 0.772 Mbbls.
- Crude Imports decreased by 1,496 kbpd and Exports are lower by 1,224 kbpd. Crude exports are lower WoW by 437 kbpd.
- Lower 48 crude production is higher by 100 kbpd.
- Real crude supply is higher by 1,861 kbpd with an adjustment factor of -305
- Finished Gasoline production decreased by 83 kbpd to 10.1 Mbpd and Distillate production increased by 89 kbpd to 5.4 Mbpd.
- Total Product demand is higher by 1,354 kbpd. Gasoline demand is lower by 59 kbpd and Distillate demand is higher by 106 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 | L48 Crude Production |
Bullish/Bearish (+/-) |
| 1 | 0 | 0 | 1 | 0 | 1 | -1 | 0 | -1 |
1 |
- We are neutral to slightly bullish on this week’s stats due to a sizeable draw in crude inventories, build in products, lower crude imports and lower crude exports. While product demand is higher, the majority of the demand is coming from other oils and propylene, but gasoline demand is lower and distillate demand is only slightly higher.
- Crude export was lower due to the restriction under Chinese government’s mandate to tackle trade war but latest news indicated that there will not be tariffs on crude imports into China. It is fair to assume that export from the US will likely pick up again in the next few weeks.
- Crude draw was largely in PADD 3 where refinery run rate hovers around its full capacity thanks to healthy margins. This raises the risk of unplanned outages should they remain elevated. However, we are also entering the seasonal maintenance season that is also the reason to stockpiles the refined products ahead of time.
- PADD I saw a sizeable build in distillate stock despite its refinery utilization dropping 4.5% and lower crude imports into the region. This is likely push-back from Europe as the Far East – Europe arb has been favorable for VLCC diesel movement and reports confirm a steady stream of VLCCs from the Far East arriving in Europe since June. The majority of the movement has come from China, Singapore and Fujairah and the effects have been depressing the US diesel market.
- PADD III built quite heavily in gasoline stock last week while overall gasoline exports were lower. US domestic gasoline demand has declined due to price and leveling off consumption and stockpiling ahead of refinery turnaround, but also the reason could be weaker demand from Latin America where price has caused them to source gasoline from Asia instead.
- Crude futures (Oct 18) is now reflecting the fundamentals of late Oct and November when refinery turnarounds return. Current price is reflecting that time frame more so than current statistics that happened last week.
