EIA Weekly Report week ending October 5th, 2018
Highlights:
- For the week ending October 5, US Crude inventories built by 6.0 Mbbls, while API was forecasting a larger build of 9.7 Mbbls and analysts were expecting a 2.6 Mbbls build.
- Gasoline inventory built by a small amount of 0.950 Mbbls, compared with API showing a build of 3.4 Mbbls.
- Distillate inventory drew by 2.7 Mbbls. API showed a larger draw of 3.5 Mbbls and analysts expectations polled in at a 2.0 Mbbls draw.
- Total Refinery Utilization declined 1.6% to 88.8%. PADD I showed the largest decline of 10.2%.
- Cushing inventory saw built by 2.4 Mbbls.
- Crude Imports decreased by 568 kbpd, while exports are higher WoW by 1.2 Mbpd.
- Lower 48 crude production is higher by 100 kbpd.
- Real crude supply decreased by 818 kbpd, with an adjustment factor of 887 kbpd.
- Finished gasoline production decreased by 239 kbpd to 9.7 Mbpd and total distillate production decreased by just 1 kbpd.
- Total Product demand decreased by 351 kbpd. Gasoline demand decreased 24 kbpd, while Distillate demand increased by 752 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 | -1 |
0 |
- We are neutral on this week’s stats despite crude inventories building for a 3rd consecutive week. Like previous weeks, the build in crude inventories should not be a total surprise considering refinery utilization dropped due to several refineries (ex. Whiting and El Dorado) are undergoing maintenance. The major standout is in PADD I where refinery utilization sharply dropped by 10.2% yet crude stocks drew by 1.5 Mbbls. Imports into PADD I were also lower, so the draw in PADD I inventories when considering the sharp drop in utilization is quite unusual. Furthermore, PADD I product inventories both built despite the decline in run rates.
- This week Hurricane Michael forced the evacuation of a portion of Gulf of Mexico crude platforms, resulting in an estimated decline of around 40% of production from the region. While the EIA report does not breakout the Gulf of Mexico production specifically, this should have some impact to PADD III inventories that may show up in next week’s EIA numbers.
- Cushing inventory built by 2.4 Mbbls, but still hovers around the 5 year low despite the wave of refinery turnarounds in PADD II and PADD III. We are anticipating that turnarounds will peak next week, at which time Cushing inventories may trend lower as refiners increase run rates upon return and inventories could be at risk of breaking through the 5 year lows heading into the end of the year.
