EIA Weekly Report week ending September 7th, 2018
Highlights:
- For the week ending September 7, US Crude inventories saw a draw of 5.3 Mbbls, compared with analysts’ expectations of a 0.805 Mbbls draw and a 8.6 Mbbls draw from API.
- Gasoline inventory built by 1.3 Mbbls, which is on the same expectations of analysts, while API was reporting a larger build of 2.1 Mbbls.
- Distillate inventory built by 6.2 Mbbls, compared with analyst expectations of 1.4 Mbbls build while API reported a 5.8 Mbbls build.
- Refinery Utilization increased by 1.0% to 97.6%.
- Cushing inventory saw a build of 1.2 Mbbls within API’s expectation
- Crude Imports decreased by 122 kbpd while exports are higher WoW by 1.4 Mbpd.
- Lower 48 crude production is lower by 200 kbpd.
- Real crude supply is lower by 25 kbpd with an adjustment factor of 437.
- Finished Gasoline production increased by 169 kbpd to 10.3 Mbpd and Distillate production rose by 97 kbpd to 5.5 Mbpd.
- Total Product demand is lower by 1.1 Mbpd. Gasoline demand is lower by 85 kbpd and Distillate demand is lower by 1.0 Mbpd.
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 |
1 |
- We are fairly neutral on this week’s stats as many bullish factors are offset by other bearish items. Crude inventory draw is supportive but offset by gains saw in refined product space. Crude import was lower than our expectation but export was higher within our expectation. Net, trade balance on crude is skewed to the bullish side thanks to recent widening WTI – Brent spreads.
- In light of Hurricane Florence set to hit the USEC this week, we expect the refinery run rates in PADD 3 continued to stay elevated and may defer their turnarounds given potential gasoline supply disruption that ultimately will keep inventory low should there be any damages. Tankers flow into USEC would also be impacted while Colonial pipelines carrying products from USGC would also be at risk of damage.
- Distillate demand took a nose dive by 1 Mbpd w-o-w. This is quite unusual and we expect this to be corrected on the upside in next week’s stats.
- Finally, Cushing inventory drew by 1.2 Mbbls is quite impressive. The market had been building up the expectation that hub will continue to fill up. We believe the PADD 3 refineries are pulling crude relentlessly thanks to favorable inland crude prices including both Canadian and US domestic crude. Export out of the USGC also play a major role in pulling the crude down from Cushing. In the short term, we expect crude flow from Cushing to remain elevated but subject to build because of refinery turnarounds in PADD 2 would push crude to Cushing.
