EIA Weekly Report week ending November 09, 2018
Highlights:
- For the week ending November 9, US Crude inventories built largely by 10.3 Mbbls, while API was reporting a build of 8.8 Mbbls and analysts were expecting a much smaller 3.2 Mbbls build.
- Gasoline inventory drew by 1.4 Mbbls, which is in line with analysts’ expectations of a 1.5 Mbbls draw while API reported a meager build of 0.2 Mbbls.
- Distillate inventory fell by 3.6 Mbbls, compared with API’s 3.2 Mbbls draw, but analysts were expecting a smaller decline of 1.7 Mbbls.
- Total Refinery Utilization is up by 0.1% to 90.1%.
- Cushing inventory built by 1.2 Mbbls.
- Crude Imports decreased by 89 kbpd and Crude Exports is lower by 355 kbpd. Total product exports is lower by 872 kbpd.
- Lower 48 crude production increased by 100 kbpd.
- Real crude supply increased by 511 kbpd, with an adjustment factor of 601 kbpd.
- Finished gasoline production increased by 342 kbpd to 10.0 Mbpd and total distillate production increased by 30 kbpd to 5.0 Mbpd.
- Total Product demand decreased by 2.0 Mbpd. Gasoline demand increased 93 kbpd, while Distillate demand increased by 315 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 | 1 | 1 | 1 | 0 | 0 | -1 | 0 | -1 |
0 |
- We are neutral on this week’s stats even though there was a large build in crude inventories. Draws in products offset some of the build and the decline in refinery utilization in PADD III attributed to half of the crude build last week. The reduction in refinery activity in the Gulf Coast came from Motiva – Port Arthur where multiple units were shutdown (VPS-4 crude section, FCC and gas oil hydrotreater) around November 4th. The cause of the shutdown was due to a power outage and Motiva was unable to return to its 603,00 bpd production until November 6th, however reported down once again on Nov 10th.
- Product demand across the board was higher WoW and is at the highest level for 2018. The majority of the demand came from Propane/Propylene where it jumped 640 kbpd on seasonal demand pick up, while gasoline and distillate were only up by 93 kbpd and 315 kbpd, respectively. Distillate demand is currently above the 5 year average, but distillate exports are lower, which is counterintuitive so this could suggest that the uptick in distillate demand is temporary due to a seasonal spike.
- With products draw this week, we shall see further support in products complex lifting overall margins. This should also translate to some support in crude demand from refinery.
- We want to note that total crude import has been hovering around 7.5 Mbpd (including Canada), export of crude + products at around 6.5 Mbpd while Import of products at around 1.5 Mbpd, the net balance is still showing a net importer for the US. However, if you exclude Canada’s crude import (3.5 Mbpd), US essentially is at an export mode. Combining with Canada, It can be perceived that North America is currently energy (crude/product) independent, eliminating the reliance on global market.
