S&P Global Platts Preview of U.S. EIA Data: Likely to Show Gasoline Stocks Fell 1.9 Million Barrels

By S&P Global Platts Oil Futures Editor Geoffrey Craig

NEW YORK - August 28, 2017

With 2.2 million barrels per day (b/d) of refining capacity shuttered on the U.S. Gulf Coast, Tropical Storm Harvey is strongly expected to lead to drawdowns in gasoline and distillate stocks, according to a Monday S&P Global Platts preview of this week’s pending U.S. Energy Information Administration (EIA) oil stocks data.

Survey of Analysts Results:
(The below may be attributed to the S&P Global Platts survey of analysts)

  • Gasoline stocks expected to fall 1.9 million barrels
  • Distillate stocks expected to drop 600,000 barrels
  • Refinery utilization expected to decline 0.3 percentage points
  • Crude stocks expected to decline 1.5 million barrels

S&P Global Platts Analysis:
(The below may be quoted in part or full, with attribution to S&P Global Platts Oil Futures Editor Geoffrey Craig)

Analysts surveyed Monday by S&P Global Platts expect gasoline stocks to show a decline of 1.9 million barrels for the latest reporting week. If confirmed, that would exceed the five-year average for the same period, which shows a draw of nearly 700,000 barrels.

Distillates stocks are expected to decline 600,000 barrels, compared with an average build of 550,000 barrels between 2012 and 2016 over the same period.

The fallout should unfold over several weeks, and the extent of damage will depend upon whether the storm inflicts flooding in Louisiana similar to the devastation wrought upon the Corpus Christi, Texas, and Houston areas.

Hitting the heart of the U.S. refining complex, traders' focus has been squarely on the potential for lost gasoline supply, which has caused a ripple effect around the world from New York Harbor to Amsterdam and Singapore.

Prices have adjusted accordingly, with benchmark crack spreads strengthening around the globe as a result.

Asia's 92 RON gasoline crack against ICE Brent was assessed Monday by S&P Global Platts at $13.19/b, up 22 cents, and within reach of a 17-month high of $13.54/b.

The front-month NYMEX RBOB crack against WTI touched $20.58/b Monday in electronic trading, up from a low of $15/b last week.

The Eurobob crack swap rose Thursday to a 15-month high at $14.05/b, and climbed to $14.45/b Friday morning.

The first glimpse of how the hurricane has impacted U.S. inventories will come Wednesday, when the Energy Information Administration releases data covering the week that ended Friday.

Late last week, refiners in Corpus Christi began closing down and offshore operators in the Gulf of Mexico evacuated personnel.

But it was not until late on Friday that the storm made landfall as a hurricane, which brought torrential rain and flooding, forcing Houston area refineries to be taken down on Sunday.

The full scale of those disruptions should be captured by the EIA inventory report to be released September 7 covering the week that ended September 1.

Market participants will take a close look at U.S. Gulf Coast (USGC) gasoline stocks, which looked ample before the storm, providing a buffer against supply shocks.

USGC inventories totaled 81.779 million barrels in the week that ended August 18, a surplus of 9.5% to the five-year average for the same time of year.

US Gulf Coast conventional (M) grade gasoline was assessed Monday at $1.7213/gal, its highest level since August 2015. As a differential to NYMEX October RBOB*, USGC gasoline was assessed at plus 15 cents/gal, the biggest premium since August 2016.

On the Atlantic Coast, home to the New York Harbor-delivered NYMEX RBOB contract, stocks were 6.77% above the five-year average at 63.034 million barrels, according to the latest EIA data.


One reason for plentiful stocks was unusually strong refinery activity this spring and summer. That stoked oversupply concerns at times, but in light of the hurricane disruptions, has had a calming influence.

Refinery utilization was expected to fall 0.3 percentage points last week to 95.1% of capacity. A year ago, the utilization rate equaled 92.8%.

The bulk of attention has centered on gasoline supply, but another question will be how demand could be negatively impacted, with many of the roads in the U.S.’ fourth largest city impassable.

A nice cushion also exists for diesel stocks. USGC stocks of low- and ultra-low sulfur diesel (ULSD) equaled 43.359 million barrels in the week that ended August 18, which was 14.8% above the five-year average.

Diesel saw more muted price reaction, until Monday morning when the bid-ask spread for Gulf Coast ULSD was heard at flat-to-plus 5 cents/gal against NYMEX October ULSD, a rare move into positive territory.

However, the market retreated into negative territory and was assessed 1.5 cents/gal below NYMEX October ULSD. That was still an increase of 1.35 cents/gal compared with Friday, representing the biggest day-on-day spike since December 2016.


The closure of major ports on the Texas coast should impact flows of crude and refined products, preventing supplies from leaving and exiting.

Corpus Christi-area ports have been closed, while the four major ports in the Houston-Galveston area complex have been closed to all inbound and outbound traffic. The port of Brownsville has reopened.

The crippling of crude export capability means more supply at home, and less abroad, which has helped widen the ICE Brent/WTI spread. That spread topped $5/b Monday for the the first time since August 2015.

Refinery operations were already set to slow for planned repairs, and the severe flooding on the Gulf Coast could accelerate that timeline, leading soon to large stocks builds.

In the Midwest, stocks are likely to rise due to pipeline closures that have prevented supplies from moving to the Gulf Coast.

Magellan Midstream Partners suspended operations on BridgeTex and Longhorn, a pair of pipelines carrying a combined 675,000 b/d of crude from the Permian Basin in Texas to the Gulf Coast.

Supply could be diverted to Cushing, Oklahoma, delivery point for the NYMEX crude contract, a scenario contributing to the wider Brent/WTI spread and weaker NYMEX crude term structure.

NYMEX October crude was trading at a discount Monday of 37 cents/b to the November contract, compared with 25 cents/b Friday. The contango** in the front-month/second-month spread was last higher May 22.

Another wildcard is US crude production, after offshore oil operators evacuated platforms and rigs, and onshore operators shut wells in the Eagle Ford Shale in South Texas.

Analysts expect crude stocks to have fallen 1.5 million barrels last week. The five-year average shows a build of 2.54 million barrels for the same time period.

For more information on crude oil, visit the S&P Global Platts website.

* Reformulated blend stock for oxygenate blending (RBOB) futures contract, the biggest premium to the front-month contract since late August.

Contango** is the industry vernacular for the condition whereby prices for nearby delivery are lower than prices for future-month delivery.

Global, Americas, Asia: Kathleen Tanzy, + 1 917 331 4607,

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