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S&P Global Platts Analysis of U.S. Energy Information Administration (EIA) Data


EIA Data: Crude, gasoline stocks diverge as refinery runs soar

By Geoffrey Craig, oil futures editor, S&P Global Platts


NEW YORK - August 23, 2017


U.S. crude oil inventories fell last week by more than analysts had expected, as refinery runs set an all-time high and gasoline stocks showed a surprise build, according to U.S. Energy Information Administration (EIA) data and a commentary by Geoffrey Craig, oil futures editor, S&P Global Platts.



  • Crude runs average 17.574 million b/d
  • Cushing, Oklahoma, stocks end streak of consecutive drawdowns
  • Gasoline stocks showed build for first time since early June


Crude oil stocks declined 6.451 million barrels to 475.437 million barrels the week that ended August 4, according to EIA data. Analysts surveyed Monday by S&P Global Platts expected a draw of 2.5 million barrels. That marked the sixth straight decline, bringing inventories to their lowest level since October 2016.

Crude stocks typically decline during the summer, but the size of recent draws has been larger than usual. Since the week ended June 30, stocks have fallen by about 33.8 million barrels, more than double the five-year average.

As a result, stocks have narrowed the surplus to the five-year average to 23.2% from nearly 27% during this time frame, according to EIA data. The biggest factor pulling barrels from storage has been U.S. refinery demand, which has been very strong since the spring when facilities returned from winter maintenance and quickly ramped up.

The amount of crude processed by refiners rose 166,000 barrels per day (b/d) to 17.574 million b/d, a record-high, eclipsing the previous mark of 17.51 million b/d set the week ended May 26.

Refinery utilization increased 0.9 percentage points to 96.3% of capacity. Analysts were looking for a decline of 0.5 percentage points. By comparison, a year ago the utilization rate was 92.2%.

On the U.S. Gulf Coast (USGC), the epicenter of the U.S. refinery complex, the utilization rate actually fell 0.5 percentage point to 96.5%. However, the USGC also saw imports plummet 634,000 b/d to 2.539 million b/d, which helped pull the region's crude stocks 4.092 million barrels lower to 245.337 million barrels.

Stocks at Cushing, Oklahoma -- delivery point for the New York Mercantile Exchange (NYMEX) crude futures contract -- rose 569,000 barrels to 56.369 barrels.

Cushing stocks had fallen nearly nonstop since nearing 70 million barrels in early April. Inventories had declined the previous 11 straight weeks, and 15 of the last 16 weeks.

Total imports decreased 491,000 b/d to 7.762 million b/d. Over the last five weeks, imports have averaged 7.9 million b/d, compared with 8.3 million b/d during the same period a year ago.

The year-on-year decline in imports has coincided with a steady climb in US production, which averaged 9.423 million b/d last week, compared with 8.445 million b/d a year ago.

Production dipped 7,000 b/d last week, but that was driven by Alaska, where output fell 22,000 b/d to 378,000 b/d. In the Lower 48 states, production rose 15,000 b/d to 9.045 million b/d, the most since July 2015.



U.S. ATLANTIC COAST(USAC) GASOLINE STOCKS RISE


With refiners processing a record amount of crude, gasoline stocks rose 3.424 million barrels last week to 231.103 million barrels, according to EIA data. Analysts expected a draw of 1.25 million barrels.

Gasoline stocks fell during the seven previous weeks ending July 28, helping firm product crack spreads that encouraged refiners to keep utilization rates high.

This cycle was supportive for oil futures, helping fuel a rally in July that lifted prompt NYMEX crude to $50/b and the NYMEX reformulated blend stock for oxygenate blending (RBOB) crack against West Texas Intermediate (WTI) to nearly $21/b.

With the focus in the market shifting toward the end of the summer driving season, that rally has stalled this month, even though gasoline demand still looks quite strong.

Gasoline implied demand averaged 9.797 million b/d the week ended August 4, which was 45,000 b/d below the level from the week prior. This represented an all-time high, according to EIA data going back to 1991.

The four-week moving average for demand rose 3,000 b/d to 9.763 million b/d, trailing the year-ago level by 13,000 b/d, but exceeding the five-year average by 528,200 b/d for the same period.

On the Atlantic Coast, home to the New York Harbor-delivered NYMEX RBOB futures contract, gasoline stocks rose 1.386 million barrels last week to 63.983 million barrels after imports more than doubled to 910,000 b/d.

USAC gasoline stocks exceeded the five-year average by 6.1%, up from 3.4%. That surplus had been trimmed to 1% the week ended July 21.



DISTILLATE EXPORTS FALL


Distillate stocks fell 1.729 million barrels last week to 147.685 million barrels, EIA data showed. Analysts expected a decline of 600,000 barrels.

Inventories have fallen six of the last seven reporting periods by a total of 4.8 million barrels. That has been a counter-seasonal trend, as stocks built by 4 million barrels on average from 2012-16 during this period.

The surplus to the five-year average has been halved to around 10% since the beginning of 2017.

On the Gulf Coast, stocks of low- and ultra-low sulfur diesel decreased 1.741 million barrels to 41.334 million barrels, a surplus of around 14.5% to the five-year average.

Total distillate exports were 138,000 b/d lower at 1.083 million b/d. Exports have averaged 1.124 million b/d over the last four weeks.



CONTACT
Kathleen Tanzy, + 1 917 331 4607, kathleen.tanzy@spglobal.com



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