U.S. commercial crude oil stocks are expected to have risen 2.5 million barrels during the reporting week ended February 7, according to Platts analysis and a survey of oil analysts. The U.S. Energy Information Administration (EIA) is scheduled to release its weekly data at 10:30 a.m. EST (1530 GMT) Wednesday.

The expected build likely will come with a combination of lower crude oil runs at U.S. refineries and fewer imports, according to analysts. Analysts surveyed expect U.S. refinery utilization rates to have fallen 0.8 percentage point the week ended February 7.

With many U.S. refineries performing seasonal maintenance, the call on crude oil likely will lessen. U.S. crude oil imports have been well below seasonal averages for much of the past year and a half. At 6.89 million barrels per day (b/d) the week ended January 31, according to EIA data, imports were nearly 700,000 b/d below year-ago levels.

Historically, crude oil runs often bottom out during February, EIA data shows. That said, runs at 15.05 million b/d for the week ended January 31 were more than 600,000 b/d higher than year-ago levels, and around 850,000 b/d higher than the EIA five-year average.

Platts reporting shows that Phillips 66's 187,000 b/d Ponca City, Oklahoma, refinery began planned maintenance as of February 5.

But additional refinery capacity was taken offline after a multiple-unit upset at Shell's 145,000 b/d Anacortes, Washington, refinery the week ended February 7. A market source with a contact at the plant said that the affected units included the refinery's 55,000 b/d fluid catalytic cracker.

Delek's 60,000 b/d Tyler, Texas, refinery experienced a power outage late in the week ended February 7, which interrupted a boiler and a fluid catalytic cracker. Additionally, Philadelphia Energy Solutions (PES) shut a crude oil unit at its 330,000 b/d Philadelphia, Pennsylvania, refinery late during the week ended February 7.

However, PES also Friday restarted the No. 1332 reformer in the Girard Point section of the plant, as well as the No. 1773 cumene unit. And Tesoro restarted a "major unit" at its 166,000 b/d Golden Eagle plant in Martinez, California.

Meanwhile, some analysts who are expecting a build in total crude oil stocks still expect a draw at the New York Mercantile Exchange (NYMEX) delivery hub at Cushing, Oklahoma.

"So here we are once again, looking at an overall build in inventories, but a more-than-likely draw out of Cushing," Oil Outlooks President Carl Larry said. "Yes, it's simply moving barrels from PADD2 to PADD3, but as we saw last week there is the possibility that we back out more imports. With a few Motiva refineries in maintenance, that's going to take the pedal off the Saudi crude to the U.S."

U.S. imports of Saudi crude oil -- at 1.34 million b/d the week ended January 31 -- have been edging lower since hitting 1.91 million b/d in mid-December.

Larry expects Cushing stocks to drop 1.5 million barrels.

Despite line-filling since mid-December on TransCanada's Gulf Coast Project pipeline, otherwise known as the southern leg of the Keystone XL pipeline, Cushing crude oil stocks have hovered right around 40 million barrels for the past eight reporting weeks.

DISTILLATES EXPECTED TO TIGHTEN FURTHER

Analysts expect U.S. distillate stocks to have fallen 2.5 million barrels the week ended February 7. U.S. stocks have fallen more than 11 million barrels since the beginning of January, concurrent with a demand surge amid record cold temperatures across much of the U.S.

At 113.79 million barrels the week ended January 31, U.S. distillate stocks are more than 23% below the EIA five-year average. On a four-week moving average, U.S. implied demand* for distillates is just below 4 million b/d. This is almost 13% above the five-year average.

Combined low and ultra-low sulfur diesel inventories on the U.S. Atlantic Coast at 18.32 million barrels were almost 33% below the EIA five-year average the week ended January 31. However, reports of imports from Europe saw spot premiums in the region ease the week ended February 7.

EIA data shows U.S. distillate imports held steady above 300,000 b/d for the second straight week between the reporting weeks ended January 24 and January 31.

"It doesn't matter who's buying it; it matters that we're not making enough," Larry said. "Between fuel switching and heating demand, we're seeing distillate production taking a hit as refineries are running through turnarounds. That's going to take its toll this week as demand stays solid and production under 5 million b/d."

EIA data for the week ended January 31 pegged U.S. distillate production at 4.59 million b/d.

U.S. gasoline stocks are expected to have stayed largely flat, in line with the EIA five-year average.
Source: Platts