Platts Pre-Report Survey of EIA/API Data Suggests a 1.5 Million-Barrel Draw in U.S. Crude Oil Stocks


New York - August 12, 2013


Platts Survey of Analysts


  • Crude oil stocks down 1.5 million barrels

  • Gasoline stocks down 2 million barrels

  • Distillates stocks up 1 million barrels

  • Refinery utilization, or run rate, down 0.3 percentage point to 90.6% of capacity


U.S. commercial crude oil stocks are expected to fall 1.5 million barrels for the reporting week ended August 9, according to a Platts analysis and survey of oil analysts Monday.


The American Petroleum Institute (API) will release its weekly stocks report at 4:30 p.m. EDT (2030 GMT) Tuesday, while the U.S. Energy Information Administration (EIA) is scheduled to release its weekly data at 10:30 a.m. EDT (1430 GMT) Wednesday.


Crude oil stocks have fallen in four out of the five most recent reporting weeks, and are down about 30.5 million barrels since the beginning of June.


Still, at 363.3 million barrels, according to EIA data, crude oil stocks were about 5.6% above the five-year average for the week ended August 2. Based solely on the same five-year average, however, crude oil stocks are expected to rise by 300,000 million barrels for the reporting week ended August 9.


Oil Outlooks President Carl Larry, who estimated crude oil stocks will decline 1.7 million barrels, said another draw at the New York Mercantile Exchange (NYMEX) delivery hub at Cushing, Oklahoma, was expected.


"We'll expect imports to ease up, but if they increase, it will raise more concerns that the light in Cushing isn't enough to feed our need," Larry said.


Cushing stocks fell below the 40 million-barrel mark for the week ended August 2. That's the first time stocks were below that level since March 23, 2012.


Crude oil stocks at Cushing have dropped just over 10 million barrels during the last 10 weeks to 39.9 million barrels on August 2. However, stocks at Cushing were still above the EIA five-year average of 33.7 million barrels.


Refinery utilization rates are expected to drop 0.3 percentage point to 90.6% of capacity, based on EIA data.


Jacob Correll, commodity analyst at Schneider Electric, said run rates were expected to cap around 90-92% of capacity, and with crack spreads narrowing and declines in refinery margins, rates should have moved lower during the week ended August 9.


The NYMEX front-month RBOB crack spread, basis ICE Brent, settled at $13.92 per barrel (/b) August 9. That's down from $15.22/b on August 5 and $17.65/b at the beginning of August.


The U.S. Midwest WTI cracking margin averaged $7.78/b the week ended August 9, down from $12.70/b the week prior, while Canadian Syncrude cracking margins fell more than $6/b to average $7.94/b the week ended August 9.


On the U.S. Gulf Coast, Louisiana Light Sweet cracking margins fell $2.50 to average $8.84/b the week ended August 9, and on the U.S. Atlantic Coast, cracking margins for Brent crude oil fell $2.25 to average $3.67/b the week ended August 9.


GASOLINE STOCKS COULD SEE DRAW; DISTILLATE UP


U.S. gasoline stocks are expected to fall 2 million barrels. The draw is counter to the EIA five-year-average projection of a 2.6 million-barrel build.


In the gasoline futures market, the backwardation in the NYMEX September RBOB contract has eased in recent days, settling at an 11.8 cents per gallon (/gal) premium Monday to the October contract. That is down from an over 18 cents/gal premium on July 16.


Imports of gasoline to the U.S. had been on the rise, at 700,000 barrels per day (b/d) for the week ended July 26, up from 322,000 b/d the week prior. For the week ended August 2, imports dipped to 635,000 b/d but were still above levels seen in late June/early July.


Imports were at 594,000 b/d on a four-week average for the reporting week ended August 2, which was below the same four-week reporting period in 2012 at 688,000 b/d.


"We may see some increase in imports to the East Coast, but not enough to hold the draw back," Larry said of the expected gasoline stock draw.


U.S. distillate stocks are expected to build by 1 million barrels.


At 126.46 million barrels for the week ended August 2, distillate stocks were about 14.3% below the EIA five-year average.


Exports of distillate could have eased, leading to a rise in stocks, Larry said.


"We may have a slight increase in demand, but we think that production covers that number," he said.


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