Growth in U.S. commercial crude oil stocks is expected to have continued during the week ended May 2, with analysts surveyed by Platts calling for a 1.3 million-barrel build.The American Petroleum Institute (API) will release its weekly report at 4:30 p.m. EDT (2030 GMT) Tuesday, and the U.S. Energy Information Administration (EIA) is scheduled to release its weekly data at 10:30 a.m. EDT (1430 GMT) Wednesday.

The build likely will be tempered by an increase in crude oil runs in U.S. refineries, especially on the U.S. Gulf Coast (USGC). Analysts surveyed expect total U.S. refinery utilization to have risen 0.5 percentage point during the week ended May 2.

At 92.9% of capacity for the week ended April 25, there is still room for USGC runs to build, which would likely slow the steady growth in regional crude oil inventories. USGC refineries often operate in the mid-90% range during the lead-up to summer demand and were as high as 94.3% of capacity as recently as the week ended January 3.

Platts data shows a fluid catalytic cracker (FCC) at Motiva's 600,000 barrels per day (b/d) Port Arthur, Texas, refinery -- the largest in the U.S. -- was started up the week ended May 2 following planned maintenance.

Despite the return of a likely massive unit, Platts data also shows that many USGC refineries took units out of production, which will likely check the week-over-week growth in runs.

In Texas, Citgo shut the 77,400 b/d No. 2 FCC in the east section of its 165,000 b/d Corpus Christi refinery for repairs following a regenerator line leak. A 23,000 b/d FCC at Alon's Big Spring refinery, also in Texas, was shut the week ended May 2 due to planned maintenance.

Further, issues with the No. 3 FCC at Marathon's 475,000 b/d Galveston Bay refinery led to flaring the week ended May 2, although it was unclear if production was impacted.

In the Midwest, an 81,100 b/d FCC at Flint Hills Resources' Pine Bend refinery in Rosemount, Minnesota, was shut the week ended May 2 for maintenance, with market sources describing the outage as "major."

On the East Coast, Monroe Energy shut an FCC at its 185,000 b/d Trainer, Pennsylvania, refinery.

CRUDE OIL INVENTORIES AT RECORD HIGHS

The most recent EIA data for the week ended April 25 shows U.S. crude oil inventories at 399.36 million barrels is the highest on record.

The bulk of this steady inventory building has come along the USGC where stocks there alone hit 215.28 million barrels the week ended April 25, also the highest on record. This has largely been a factor of steady southward flows out of Cushing, Oklahoma, where stocks have fallen more than 38% since mid-January.

At 25.43 million barrels for the week ended April 25, Cushing stocks are more than 35% below the EIA five-year average.

GASOLINE STOCKS TO FALL, DISTILLATES TO BUILD

U.S. gasoline stocks are expected to have fallen by around 900,000 barrels the week ended May 2 amid an expected seasonal demand increase.

Recent U.S. employment data should be bullish for New York Mercantile Exchange (NYMEX) RBOB as well as for a further tightening of inventories, according to Oil Outlooks President Carl Larry. U.S. non-farm payrolls increased by 288,000 jobs in April while the unemployment rate fell 0.4 percentage point to 6.3%, according to data released Friday.

"Watch for the odd drop in exports last week to get back to normalcy and domestic demand catch up with all of the new workers in the economy," Larry said. "The weather has thawed enough to get people up and out."

U.S. distillate stocks are expected to have risen 1.5 million barrels the week ended May 2 amid an expected, but slight, downturn in U.S. product exports.

Platts cFlow ship-tracking software shows export activity was minimal the week ended May 2, with numerous vessels having left the USGC region unladen, en route to Europe and Latin America.

"If we're talking about a loss of exports, this is where it makes more sense," Larry said. "We've heard plenty about the weak demand in Latin America, and that's going to take its toll."
Source: Platts