EIA Weekly Report week ending July 13, 2018
Highlights:
- For the week ending July 13th, US Crude inventories saw a large build of 5.8 Mbbls, compared with analysts’ expectations of a 3.6 Mbbls draw and a 0.629 Mbbls build from API.
- Gasoline inventory drew by 3.2 Mbbls, compared with API reporting a build of 0.425 Mbbls while analysts expected gasoline to be flat WoW.
- Distillate inventory drew by 0.370 Mbbls, compared with a 1.7 Mbbls build from API while analyst expectations showed a 0.9 Mbbls build.
- Refinery Utilization decreased by 2.4% to 94.3%.
- Cushing inventory saw a draw of 0.860 Mbbls.
- Crude Imports increased by 1.6 Mbpd and Exports are lower by 2.0 Mbpd. Crude exports are lower WoW by 566 kbpd.
- Lower 48 crude production is unchanged WoW.
- Real crude supply is higher by 2.2 Mbpd with an adjustment factor of -532.
- Finished Gasoline production decreased by 407 kbpd to 10.3 Mbpd and Distillate production decreased by 268 kbpd to 5.2 Mbpd.
- Total Product demand is higher WoW by 1.4 Mbpd. Gasoline demand is higher by 433 kbpd WoW and Distillate demand is higher by 336 kbpd WoW.
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 | 1 | 1 | 1 | 1 | -1 | -1 | -1 | 0 |
0 |
- We are neutral on this week’s stats despite an unexpected build of 5.8 Mbbls in crude inventories, higher crude imports, and lower crude exports. These factors are negated by draws in products, stronger demand and lack of further increase in L48 production.
- Crude imports increased 1.6 Mbpd WoW and PADD I saw its crude stock increase by 2.8 Mbbls. This is somewhat odd as PADD I’s utilization rate decreased another week and this time by 5.4%. A possible explanation could be that since WTI-Brent has significantly narrowed in the past month and Bonny Light/West African grades have been at par with Brent as of late, but has since recently regained its premium, it could be that PADD I refiners used this opportunity to buy a cheaper Bonny Light/West African grade.
- Exports dropped quite significantly WoW, which is what we anticipated a few weeks ago and now crude export levels have returned to a more expected level. Export levels could remain at these levels or temporarily weaken further as the US – China trade war escalates. On Monday, China’s largest independent oil refinery, Dongming Petrochemical, announced that it has stopped buying US crude and is switching to Iranian and West African crude. In addition, reports indicate that global tanker demand have decreased and this is confirmed by softening rates and a surplus of tanker availability.
