EIA Weekly Report week ending June 1, 2018
Highlights:
- For the week ending June 1st, US Crude inventories saw a build of 2.1 Mbbls, compared with analysts’ expectations of a 1.8 Mbbls draw and a 2.0 Mbbls draw from API.
- Gasoline inventory built by 4.6 Mbbls, while API reported a 3.8 Mbbls build and analysts expected a 0.6 Mbbls draw.
- Distillate inventory rose by 2.2 Mbbls, compared with API reporting a 0.871 Mbbls draw while analyst expectations showed a 0.8 Mbbls build.
- Refinery Utilization increased by 1.5% to 95.4%.
- Cushing inventory saw a draw of 0.955 Mbbls.
- Crude Imports increased by 715 kbpd and Exports are lower by 496 kbpd.
- Lower 48 crude production increased 35 kbpd to 10.3 Mbpd.
- Real crude supply is higher by 1.0 Mbpd with a adjustment factor of 146.
- Finished Gasoline production decreased by 775 kbpd to 9.65 Mbpd and Distillate production increased by 28 kbpd to 5.32 Mbpd.
- Total Product demand is significantly lower WoW by 2,431 kbpd. Gasoline demand is lower by 713 kbpd WoW and Distillate demand is lower by 817 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 |
Real Crude Supply |
Bullish/Bearish (+/-) |
|
-1 |
-1 |
-1 |
-1 |
1 |
-1 |
-1 |
1 |
-1 |
-5 |
- We are bearish on this week’s stats due larger than expected build in crude and product inventories, lower exports and significantly lower product demand.
- Total Product demand saw a very large decline WoW by 11.6%, which is unexpected considering for the past 5 weeks it has remained quite strong. EIA’s demand statistics are based on “product supplied” metric, which constitutes several factors, however the one area it doesn’t measure is true retail demand. In other words, retail stations may not be buying as much due to higher product prices and soft consumer demand. Retails stations could also be oversupplied based on pre-emptive purchases ahead of driving season.
- As margins continue to be favorable for refiners, refinery utilization rate rose for the 4th consecutive week and is at the highest it has been all year at 95.4% utilization.
- Despite higher crude inputs overall refining product production, specifically finished gasoline, declined WoW yet inventories built quite heavily for fuel stocks. Furthermore, distillate exports continue to be strong, increasing 536 kbpd WoW, but distillate inventories built by 2.2 Mbbls.
