EIA Weekly Report week ending September 14th, 2018
Highlights:
- For the week ending September 14, US Crude inventories drew by just under 2.1Mbbls, close to analyst expectations of a 2.7 Mbbls draw. API, however, was forecasting a build of 1.2Mbbls
- Gasoline inventory drew by 1.7 Mbbls, much larger than analyst expectations of only a 100kbbls draw.
- Distillate inventory built by a meager 840kbbls, in line with market expectations of a 650kbbls build.
- Total Refinery Utilization decreased by 2.2% to 95.4%.
- Cushing inventory saw a decline of 1.2 Mbbls.
- Crude Imports increased by 433 kbpd, while exports are higher WoW by 1.0 Mbpd.
- Lower 48 crude production increased by 100 kbpd.
- Real crude supply bumped up by 40kbpd, with an adjustment factor of only 27kbpd.
- Finished Gasoline production decreased by 114 kbpd to under 10.3Mbpd and total distillate production also declined by 80 kbpd to under 5.5 Mbpd.
- Total Product demand rebounded and moved higher by 560kbpd. Gasoline demand slipped by 115 kbpd, while Distillate demand surged by 860 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 | 1 | -1 | 1 | -1 | -1 |
2 |
- This week’s statistics at face value appear bullish, but part of the numbers are likely seeing some Hurricane related impacts.
- We believe stats were impacted by hurricane especially with gasoline demand, refinery activity and also crude imports, but this past week’s EIA statistics are showing some conflicting data in relation to those expectations. PADD III utilization actually declined quite sharply (2.1% WoW), while PADD I utilization also fell sharply by 7.9%. PADD I utilization likely fell as a result of refineries preparing for potential delays in crude imports associated with the Hurricane, but PADD III declining is somewhat surprising as we anticipated the USGC would elect to continue running at high levels to compensate.
- PADD III was expected to see increases in turnaround activity, so a decline in utilization of 2.1% and reduced crude inputs of 240kbpd is understandable, but it is strange to see such a large draw in crude inventories in the region when also taking into consideration the increased crude imports.
- Distillate demand rebounded after a sharp decline last week, increasing by 860kbpd. However, distillate exports fell last week by 92kbpd.
- L48 production increased by 100kbpd last week, but yesterday’s drilling activity report gave some expectations that growth rates may be slowing. Permian, which has long supported overall US crude production growth, is only expected to grow by 30kbpd month over month in October.
- Cushing inventory draw was much less compared to what Genscape was showing (-2.2 Mbbls) however the draw continues to challenge the operational limit that eventually leads to “call” for crude at the hub.
