EIA Weekly Report week ending May 25, 2018
Highlights:
- For the week ending May 25th, US Crude inventories saw a draw of 3.6 Mbbls, compared with analysts’ expectations of a 0.5 Mbbls draw and a 1.0 Mbbls build from API.
- Gasoline inventory edged higher by 0.534 Mbbls, while API reported a 1.7 Mbbls draw and analysts expected a 1.4 Mbbls draw.
- Distillate inventory marginally built by 0.634 Mbbls, compared with API reporting a 1.5 Mbbls build while analyst expectations showed a 1.3 Mbbls draw.
- Refinery Utilization increased by 2.1% to 93.9%.
- Cushing inventory saw a draw of 0.556 Mbbls.
- Crude Imports decreased by 528 kbpd and Exports are higher by 740 kbpd.
- Lower 48 crude production increased 20 kbpd to 10.265 Mbpd.
- Real crude supply is lower by 0.929 Mbpd with a adjustment factor of 203.
- Finished Gasoline production increased by 381 kbpd to 10.4 Mbpd and Distillate production increased by 358 kbpd to 5.3 Mbpd.
- Total Product demand is higher WoW by 234 kbpd. Gasoline demand is unchanged WoW and Distillate demand is higher by 682 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 |
-1 |
1 |
-1 |
1 |
1 |
1 |
1 |
3 |
- We are bullish on this week’s stats due to a large draw in crude inventories, lower crude imports, higher crude exports, higher refinery utilization and lower real crude supply.
- PADD III crude stock fell by 3.1 Mbbls WoW, which made up the majority of the total US crude inventory draw. Crude imports into the region were offset by the 2.7% increase WoW in refinery utilization. Overall crude exports have remained strong WoW and given that most of the US export infrastructure is located in the Gulf Coast this would help draw down PADD III stocks. However, it is very apparent that PADD III crude and product balances are reliant on the export market. The distillate market in PADD III drew by nearly 2.0 Mbbls on the back of a very sharp increase in domestic demand (682 kbpd), but overall distillate exports saw a drastic decline WoW by 338 kbpd. If this week’s distillate demand increase was a one-off event (as it is already above the 5 year range) then export levels soften further we could reasonably expect large builds in distillate inventories due the high refinery utilization rates.
- Additionally, PADD II is now running at 100% utilization rates, which at this level leaves the region highly susceptible to downward production risks.
