US gasoline stocks continued to be drawn down well below normal levels for this time of year, according to the data released this morning from the EIA. While 700,000 of the 2.8 million barrel decline was on the isolated West Coast, inventories fell in every region.
At 194.2 million barrels, total gasoline stocks are at the lowest level since October 7, 2005, following the massive hurricane-related refinery outages on the Gulf Coast. Refinery utilization fell unexpectedly last week, slashing gasoline production at a time when it usually picks up.
Imports, while increasing to over 1.1 million b/d, are not able to pick up the slack, while demand continues to run at more than a 2% year-over-year growth rate.
What's worse is that there have been more unplanned maintenance problems this week -- BP Toledo, Valero Lake Charles -- which should keep production down in next week's report.
Gulf Coast gasoline cash values have risen to 20 cts/gal over NY Harbor, which is drawing imports to Florida instead of the northeast. As a result, look for a bigger PADD 1 draw next week, and higher NYMEX RBOB crack.
On another note, Cushing stocks fell 1.2 million barrels, as the partial restart of Valero's McKee refinery resulted in some pulling of barrels from the Cushing area. It will take some time to draw down some stocks to the point where the NYMEX WTI front spread tightens significantly.
Leave a comment