U.S. commercial crude oil stocks are expected to have decreased 700,000 barrels in the week ended last Friday, a survey of analysts showed. The U.S. Energy Information Administration (EIA) is scheduled to release its weekly data at 10:30 am EDT (1430 GMT) Wednesday.

The EIA five-year (2010-14) average shows inventories decreased 2.1 million barrels per day (b/d) for the same reporting period, representing the last drawdown before the start of the autumn refinery turnaround season.

From late September through November, a drop in crude demand as refiners perform planned repairs typically results in stockpiles building.

Analysts will be examining the EIA data for indications of whether refiners have already started to wind down operations.

The refinery utilization rate is expected last week to have declined 0.7 percentage point to 92.4% of operable capacity after having soared the week prior.

For the week ended September 11, however, the refinery utilization rate rose 2.2 percentage points to 93.1% of operating capacity, matching the biggest week-on-week jump since April.

A reduction in refinery demand would have put upward pressure on crude stocks, though the slowdown could have been offset by a fall in crude output.

U.S. production, excluding Alaska, has fallen three consecutive weeks through September 11, the EIA estimates.

The agency's most recent estimate for output in the Lower 48 states was 8.648 million b/d, which was down 6% from its peak in June.

Another weekly decrease will serve as further evidence that lower oil prices have dented U.S. production.
U.S. crude oil inventories not only reflect domestic supply, but also global production through crude imports.

In that regard, imports could be headed higher. For the week ended September 11, imports averaged 7.189 million b/d, versus a year-to-date average of 7.3 million b/d.

Moreover, sourcing cargoes from abroad has been growing more attractive in terms of price. The Intercontinental Exchange (ICE) Brent/West Texas Intermediate (WTI) spread was mostly in a band of $2-$3 per barrel (/b) last week, its tightest range since January.

Brent's premium to WTI eroded steadily from more than $7/b in mid-August to as little as $1.50/b at one point last week.

'Several themes have been driving the reduction in the spread, including a shifting North American landscape, light oil abundance in the Atlantic Basin and concerns about the overall health of the global economy,' Barclays analysts said in a Monday note.

In refinery news, Northern Tier Energy shut a crude distillation unit last week at its 90,500 b/d refinery in St. Paul Park, Minnesota for unplanned maintenance, the company said.

Distillate stocks seen higher

U.S. distillate stocks are expected to have built 1.25 million barrels over the latest reporting week.
The EIA five-year average for the same reporting period shows inventories almost unchanged, falling 84,000 barrels.

BP shut one of two coking units last week at its joint-venture, the 152,000-b/d refinery in Toledo, Ohio, for planned refinery work, a source familiar with refinery operations said.

A BP spokesman said the company does not typically comment on day-to-day operations at its facilities.

U.S. gasoline stocks are expected to have risen 450,000 barrels last week, the analysts surveyed said.
The EIA five-year average shows gasoline inventories increasing 840,000 barrels in the comparable reporting week.

A fluid catalytic cracker at Marathon's 451,000-b/d Galveston Bay, Texas, refinery was taken offline last week, trade sources said. A Marathon spokesman declined to comment.
Source: Platts