EIA Weekly Report week ending November 16, 2018
Highlights:
- For the week ending November 16, US Crude inventories built by 4.9 Mbbls, while API was reporting a draw of 1.5 Mbbls and analysts were expecting a 2.9 Mbbls build.
- Gasoline inventory drew by 1.3 Mbbls, while API reported a build of 0.7 Mbbls and analyst expectations was showing a 0.2 Mbbls draw.
- Distillate inventory is down slightly by 78 kbbls, compared with API’s 1.8 Mbbls draw while analysts were expecting a larger draw of 2.7 Mbbls.
- Total Refinery Utilization is up by 2.6% to 92.7%.
- Cushing inventory drew down by 116 kbbls.
- Crude Imports increased by 103 kbpd and Crude Exports is lower by 81 kbpd. Total product exports is lower by 45 kbpd.
- Lower 48 crude production is unchanged.
- Real crude supply decreased by 259 kbpd, with an adjustment factor of 154 kbpd.
- Finished gasoline production decreased by 20 kbpd to 10.0 Mbpd and total distillate production increased by 208 kbpd to 5.2 Mbpd.
- Total Product demand decreased by 1.1 Mbpd. Gasoline demand decreased 7 kbpd, while Distillate demand decreased by 363 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 | 0 | -1 | -1 | 0 | 0 | 1 | 0 |
-1 |
- We are slightly bearish on this week’s stats due to lower product demand, higher crude imports with lower exports and another week of above expectation build in crude inventories. The build in PADD III was surprisingly the main contributor to the build last week and that is slightly concerning considering that refinery utilization has increased to 95.5%, which is much higher than this time of year last year (up nearly 5% YoY).
- The fact that Sunrise pipeline expansion has started its operation, the logical path is to send crude from Permian to Cushing then reallocate to USGC region for processing. This however should discourage import and promote export out of the USGC over time.
- The increase in crude imports into PADD III should not be perceived as bearish given the fact the import level was extremely low last week at 1.9 (YTD low), the rebound this past week simply brought the level back to its average levels.
- The sharp drop in crude prices this past month has Trump praising it as a “tax cut” for consumers, but this will ultimately hurt shale producers and while the impact may not be immediate it will eventually trigger some cutbacks and thus create headwinds for the US economy.
