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- Key Platts survey findings:
- Crude oil stocks up 1.2 million barrels
- Gasoline stocks down 1.7 million barrels
- Distillates stocks up 900,000 barrels
- Refinery utilisation or run rate down 0.4 at 84.1%
Analysts expect weekly US oil inventory data from the Energy Information Administration (EIA) and the American Petroleum Institute (API) to show a build in commercial crude stocks of 1.2 million barrels for the reporting week ended August 7, a Platts survey showed Monday.
The API is scheduled to release its data at 2030 GMT Tuesday. The EIA report is due to be released at 1430 GMT Wednesday.
“While crude imports may not jump back above the 10-million-barrel level, they’ll likely rebound from last week’s exceptionally low level of 9.287 million barrels per day (b/d),” said Linda Rafield, senior oil analyst and editor of the Platts Futures and Derivatives Review. An increase in imports plus a projected drop in refinery run rates could cause the third consecutive weekly inventories increase. The steep contango in the front months of the New York Mercantile Exchange oil futures contracts will continue to provide the economic incentive to store barrels. In contango, prices for oil delivered in the future are higher than prices for near-term delivery.
Analysts expect refinery utilisation to have dropped another 0.4 percentage points to 84.1%, based on last week’s EIA data.
“Margins did not rebound until mid-June, suggesting refiners still had reason to lower output for the next two reporting weeks,” Rafield said. Typically, refiners decide their crude slate two months in advance; profit margins at the beginning of June and the production decisions made at that time are only now being reflected in actual data being released.
Analysts anticipate a decline in gasoline stocks of 1.7 million barrels. “Historically, implied demand starts to edge higher at the beginning of August,” said Rafield. “With production at unseasonable levels, stocks are apt to tumble again.”
Middle distillate stocks are projected by analysts to build 900,000 barrels. With distillate output already at low levels, demand will remain a key driver to the distillate data.
Implied distillate demand at 3.396 million b/d was still running 7.9% below year-ago levels the week ending July 31. Implied demand is the amount of product that moves through the US distribution system, not actual end consumption.
