U.S. commercial crude oil stocks are expected to have dropped by 2.5 million barrels for the reporting week ended August 30, 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 11 a.m. EDT (1500 GMT) Thursday. The EIA five-year average shows crude oil stocks could fall more than 3 million barrels during this reporting period.
The expected draw in stocks will likely come amid a pullback in imports and despite a 0.8 percentage-point decline in U.S. refinery utilization rates, analysts said.
"I think that we're going to be pulling back on those imports this week," Oil Outlooks President Carl Larry said. "We have domestic production staying strong, but refineries are back on track and that keeps the oil in the system."
U.S. crude oil production was reported at 7.61 million barrels per day (b/d) for the week ended August 23, the highest total in 24 years, EIA data show. And while crude oil runs have backed off slightly after a four-week period above 16 million b/d between June and July, refinery runs remain more than 700,000 b/d above the EIA five-year average.
Platts data shows a coker at Shell's 165,000 b/d Martinez, California, refinery was to be shut for maintenance, according to an August 28 filing with local health officials. It was not clear when maintenance would begin or end.
U.S. gasoline stocks are expected to have fallen 1 million barrels, just slightly below the week-on-week change in the EIA five-year average.
"I will bow down to those looking for a draw here," Larry said, despite projecting a 1 million-barrel build.
"I'm going by the numbers and it's all about demand easing off this week," he added. "There wasn't as much as we anticipated for the holiday and we think that leads to a bit of a build here. Not that we're bearish by any means, but supply is building ahead of the fall maintenance season."
A downed fluid catalytic converter (FCC) with a capacity of 95,000 b/d at Irving Oil's Saint John, New Brunswick, refinery could impact U.S. Atlantic Coast gasoline stocks as the refiner is a major supplier to the region.
The FCC was shut on August 23 for seven days of planned maintenance, according to trade sources, although they also said Irving had enough gasoline to cover the absence of the FCC for the estimated duration of the work.
Meanwhile, analysts on average expect U.S. distillate stocks to increase by about 800,000 barrels, almost twice the week-on-week change shown in the EIA five-year average.
A diesel hydrotreater at Citgo's 167,000 b/d Lemont, Illinois, refinery was restarted August 26 after unplanned maintenance on August 23. A company official, however, said there had been no impact on overall production.
Larry bucked the consensus regarding distillate stocks as well, expecting stocks to fall by 1 million barrels.
"We think that the issues in the Middle East and Japan are already affecting our exports and that number is only going higher from its record levels," he said.
Source: Platts