EIA Weekly Report week ending November 23, 2018
Highlights:
- For the week ending November 23, US Crude inventories built by 3.6 Mbbls, while API was reporting a build of 3.5 Mbbls and analysts were expecting a draw of 0.6 Mbbls.
- Gasoline inventory drew by 0.8 Mbbls, while API reported a draw of 2.6 Mbbls and analyst expectations was showing a 0.8 Mbbls build.
- Distillate inventory built by 2.6 Mbbls, compared with API’s 1.2 Mbbls while analysts were expecting a draw of 1.5 Mbbls.
- Total Refinery Utilization is up by 2.9% to 95.6%.
- Cushing inventory built by 1.2 Mbbls.
- Crude Imports increased by 608 kbpd and Crude Exports is also higher by 473 kbpd. Total product exports is higher by 110 kbpd.
- Lower 48 crude production is unchanged.
- Real crude supply increased by 131 kbpd.
- Finished gasoline production increased by 132 kbpd to 10.2 Mbpd and total distillate production increased by 270 kbpd to 5.5 Mbpd.
- Total Product demand decreased by 0.8 Mbpd. Gasoline demand increased by 3 kbpd, while Distillate demand decreased by 701 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 | 0 | -1 | -1 | -1 | -1 | 1 | 1 | 0 |
-3 |
- We are bearish on this weeks stats mainly due to rising crude inventory (largely in P2+3) amid rising refinery utilization rate, and a drag on product demand mostly on distillate which has fallen below five year low levels. The increase in import mainly from Kuwait, Nigeria and Saudi Arabia was not able to be offset by the rise in export, contributing to an increase in real supply measure.
- Refinery run rates were higher across the board except for PADD 4. The current margins continued to be depressed and given the rise in distillate inventory and more of an average winter heating demand, refineries could face with decisions to cut back on crude runs again. Margins in the Midwest and Group 3 are trending lower suggesting the products would be pushed back to PADD 3 where margins have already been at near break even levels.
- The trajectory and rate of crude inventory build has been above the trend for the past month resulting in a shift in fundamental picture from bullish to bearish sharply. This is another reminder that over supplied market was only temporarily fixed by OPEC production cut for the past two years, a period allowing the US to grow the tight oil production at a rapid pace. Even if OPEC decides to cut on December 6, the US will continue to take advantage of the situation by eroding the balance and taking more market shares.
