U.S. commercial crude oil stocks are expected to have fallen 250,000 barrels in the week ended Friday, May 8, a survey of analysts showed.The U.S. Energy Information Administration (EIA) is scheduled to release its weekly data at 10:30 a.m. EDT Wednesday.The EIA five-year (2010-2014) average shows inventories increasing 1.6 million barrels for the reporting week. One question for this week is whether a crude stocks draw will continue for a second week in a row. Inventories tend to rise steadily through the winter and early spring as refineries shut for seasonal repairs. As refineries return from maintenance, more barrels tend to leave storage than enter, reversing the net flow.

The most recent EIA weekly inventory suggested the seasonal change could already be underway. For the week ended May 1, crude stocks fell 3.9 million barrels, the first decline seen since the week ended January 2.

Refinery demand has been strong, with the utilization rate averaging 91.95% the last four weeks ended May 1, compared with 90.25% the same period a year ago.

Analysts expect the refinery utilization rate to increase 0.4 percentage point to 93.4% of operable capacity.

A related question concerns imports and whether data will show a rebound last week after plummeting 905,000 barrels per day (b/d) to 6.541 million b/d in the week ended May 1.

Crude stocks drew lower in the week ended May 1 due in part to lower imports. But analysts cautioned against assigning too much meaning to week-to-week swings because import data can be influenced by a how a single tanker is accounted for in records.

A rebound in imports, closer to the year-to-date average of 7.3 million b/d, would help push crude stocks higher, analysts said.

Stocks at Cushing, Oklahoma -- delivery point for the New York Mercantile Exchange (NYMEX) crude futures contract -- fell for the second consecutive week through May 1. Cushing became a focal point for market watchers as stocks there built continuously from early December until late April to record highs. After two weeks of draws, speculation has died down on Cushing's likelihood of hitting its working capacity, though analysts will still be interested in seeing whether the streak continues. The last time Cushing's inventory fell three weeks in a row was almost a year ago.

Phillips 66's 247,000 b/d Alliance refinery in Belle Chasse, Louisiana, had production issues last week due to power outages, sources said. A Phillips 66 spokesman said the cause of the power outage is under investigation by the local utility company and did not give a timeline on when units would be restarted.

Tesoro restarted a crude distillation unit last week at its 120,000 b/d Anacortes, Washington, refinery, a source said. The refinery has CDU capacity of 120,000 b/d, EIA data showed.

Gasoline stocks seen rising

With refineries ramping up ahead of the peak summer driving season, analysts are following refined product stocks to see whether demand can keep pace with supplies.

U.S. gasoline stocks are expected to have increased 170,000 barrels last week, the analysts surveyed said. The EIA five-year average shows inventories falling 504,000 barrels in the comparable reporting week.

U.S. distillate stocks are expected to have increased 420,000 barrels over the latest reporting week, compared with the EIA five-year average for the same reporting week showing a 152,000-barrel increase.

Chevron began planned maintenance last week at its 269,000-b/d Los Angeles, California, refinery in El Segundo, which included work on a diesel hydrotreater among other units, Morgan Stanley analysts said in a report. A hydrotreater reduces sulfur and nitrogen to produce high specification distillates.

A 60,000-b/d hydrocracker at Motiva's 620,000-b/d Port Arthur, Texas, refinery was closed last week for unplanned maintenance, a source said. A hydrocracker converts heavy feedstock into refined products, including jet fuel and diesel.
Source: Platts