U.S. commercial crude oil stocks were expected to have fallen 1.5 million barrels during the reporting week ended September 13, according to a Platts analysis and survey of oil analysts. The U.S. Energy Information Administration (EIA) is scheduled to release its weekly data at 10:30 a.m. EDT (1430 GMT) Wednesday.
The drop is consistent with the week-on-week change in the EIA five-year average, which shows crude oil stocks typically fall around 1.8 million barrels during this reporting period.
Imports are expected to continue to decline although analysts were mixed on crude oil runs. Crude oil imports have fallen during the past three reporting periods, from 8.4 million barrels per day (b/d) the week ended August 23 to just over 8 million b/d on September 6.
"At some point everyone is going to figure out that the imports we're not bringing in is more a matter of choice," said Oil Outlooks President Carl Larry, adding that refiners were likely going to continue to reduce imports until maintenance season ended.
Analysts surveyed expect U.S. refinery utilization rates to have declined 0.4 percentage point during the week ended September 13.
While U.S. refining margins have come off, they are likely not low enough to result in run cuts. While lower gasoline prices have dragged margins lower through much of the U.S., margins remain supported by relatively lower crude oil prices.
Midwest cracking margins for WTI averaged $11.70 per barrel (/b) during the week ended September 13, down from $15.83 during the week ended September 6.
In contrast, refiners in Europe have recently talked about cutting runs because of poor margins, largely the result of higher crude oil prices. Northwest European Brent cracking margins averaged just $1.19/b during the week ended September 13, while Urals margins in Italy averaged minus $1.37/b.
Total's 174,000 b/d Port Arthur, Texas, refinery reduced rates during the week ended September 13 on unspecified units following a power outage on September 9, according to a regulatory filing.
BP shut a fluid catalytic cracking (FCC) unit at its 413,000 b/d Whiting, Indiana, refinery on September 10 for unplanned maintenance in addition to maintenance on a 64,000 b/d reformer, sources said.
Yet some refineries returned units to production. ExxonMobil's 149,500 b/d Torrance, California, refinery was expected to resume full production at an affected alkylation unit, an FCC and a sulfur recovery unit. An FCC at Phillips 66's 139,500 b/d Los Angeles refinery also returned to production during the week ended September 13. CVR Refining also returned an FCC to production during the week ended September 13 after maintenance.
U.S. distillate stocks are expected to have increased 1 million barrels during the week ended September 13, counter to a slight decline seen in the EIA five-year average. U.S. gasoline stocks are expected to have remained flat.
Despite the expected increase in distillates, seasonal demand and continued exports should soon begin to weigh on stocks, Larry said.
"Add to this the issues that continue in Port Arthur at the Motiva plant and we think when we do turn lower, it will be for an extended period," he said. Trading sources have said a hydrocracker at the 600,000 b/d refinery would be down for six weeks from late August for repairs.
Source: Platts