U.S. commercial crude oil stocks fell 1.84 million barrels to 360.21 million barrels during the reporting week ended August 30, U.S. Energy Information Administration (EIA) data showed. A Platts analysis and a survey of oil analysts Tuesday expected stocks to have fallen 2.5 million barrels. The data were released a day later than usual due to the U.S. Labor Day holiday on Monday.
The draw was due to a combination of a decline in imports and a rebound in crude oil runs at U.S. refineries. U.S. crude oil imports fell 119,000 barrels per day (b/d) to 8.26 million b/d during the week ended August 30, while runs rose 162,000 b/d to 15.94 million b/d.
The increase in runs helped boost U.S. refinery utilization by 0.5 percentage point to 91.7% of capacity. Analysts had been expecting a 0.8 percentage-point decline.
The draw was most severe in the U.S. Midwest, where stocks fell 2.39 million barrels to 99.24 million barrels. This marks the first reporting week Midwest crude oil stocks have been below the 100 million-barrel level since March 2012.
Although stocks are still at a near 13% surplus to the EIA five-year average, the surplus has dwindled steadily from nearly 40% in early January.
Imports to the Midwest – nearly all of which come from Canada – fell 204,000 b/d to 1.82 million b/d during the week ended August 30, EIA data showed. Total Canadian imports to the U.S. fell 305,000 b/d week on week to 2.35 million b/d.
Midwest refinery runs fell 58,000 b/d to 3.53 million b/d during the week ended August 30. Despite this, runs are up 509,000 b/d from May 24.
A large factor in the recent reduction in Midwest crude oil stocks is a steady drawdown at Cushing, Oklahoma. Stocks at Cushing – delivery point for the New York Mercantile Exchange (NYMEX) crude oil futures contract – fell 1.83 million barrels to 34.76 million barrels during the week ended August 30.
Cushing stocks have fallen 15.75 million barrels since May 24 as Midwest refiners have ramped up crude oil runs and as barrels continue to flow to the U.S. Gulf Coast (USGC) via the Enterprise Seaway pipeline.
USGC crude oil stocks rose 571,000 barrels to 178.55 million barrels during the week ended August 30, as imports ticked 50,000 b/d higher to 3.94 million b/d. USGC crude oil runs rose 151,000 b/d to 8.19 million b/d, limiting the scope of the build. This helped boost USGC refinery utilization by 1.7 percentage points to 92.7% of capacity.
U.S. Atlantic Coast (USAC) crude oil stocks fell 867,000 barrels to 11.27 million barrels during the week ended August 30.
U.S. West Coast (USWC) crude oil stocks rose 835,000 barrels to 52.26 million barrels, as imports rose 212,000 b/d to 1.31 million b/d. Crude oil runs fell 46,000 b/d to 2.49 million b/d on the USWC.
Meanwhile, U.S. gasoline stocks fell 1.83 million barrels to 215.99 million barrels during the week ended August 30, EIA data showed. Analysts were expecting stocks to have fallen 1 million barrels.
The draw was equally strong in the Midwest and the USGC. Midwest gasoline stocks fell 997,000 barrels to 46.79 million barrels, while USGC stocks fell 986,000 barrels to 75.57 million barrels.
Stocks in the USAC region – home to the New York Harbor-delivered NYMEX RBOB contract – held largely steady, down a scant 36,000 barrels to 58.26 million barrels.
Implied demand* for gasoline rose 63,000 b/d to 9.09 million b/d during the week ended August 30, although on a four-week moving average, demand is down 38,000 b/d to 9.13 million b/d.
U.S. distillate stocks rose 549,000 barrels to 129.59 million barrels during the week ended August 30, coming in just under analysts' expectations. Distillate production pushed past the 5 million b/d mark for the first time in seven weeks.
While USAC stocks rose 1.1 million barrels to 43.08 million barrels during the week ended August 30, USGC stocks fell 1.16 million barrels to 40.42 million barrels.
Combined USAC low and ultra low sulfur diesel stocks of 33 million barrels are more than 21% above the EIA five-year average. However, combined USGC stocks of 35.79 million barrels are almost 10% below the five-year average.
The USGC is a major exporter of distillates, and the decline in stocks could equate to an increase in exports, rather than a tightness in local supply.
EIA weekly data pegs U.S. distillate exports at 1.26 million b/d during the past three reporting weeks. However, this is just an estimate. The more reliable, yet dated, monthly data shows U.S. distillate exports in June at 1.29 million b/d.
* Implied demand is the amount of product that moves through the U.S. distribution system, not actual end consumption.
Source: Platts