U.S. commercial crude oil stocks are expected to have fallen 2.3 million barrels during the reporting week ended December 20, 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 11:00 a.m. EST (1600 GMT) Friday.
This would be the fourth consecutive weekly drop in U.S. crude oil stocks. Stocks fell nearly 20 million barrels between November 22 and December 13. Despite the rapid decline, at 372.31 million barrels the week ended December 13, U.S. crude oil stocks remain at a quite comfortable 10% surplus to the EIA five-year average.
"There's plenty of crude getting used with margins looking this good for the end of the year," Oil Outlooks President Carl Larry said. "Now add to that some line fill for [TransCanada's Gulf Coast Project pipeline] and even more that is going to fill the Ho-Ho [Houston to Houma] line. These next two weeks might set the tone and the pace for 2014."
The Light Louisiana Sweet cracking margin on the U.S. Gulf Coast climbed $1.45 per barrel (/b) to average $12.43/b the week ended December 20, while the West Texas Intermediate cracking margin climbed $3.25/b to average $11.44/b. The Mars coking margin edged up 92 cents/b to average $8.60/b.
That said, U.S. refinery utilization is expected to have fallen 0.1 percentage point the week ended December 20.
"As much as we think that margins are strong, it's at 91.5%, and there's room to ease back ahead of the holidays," Larry said.
Platts data shows the 240,000 barrels per day (b/d) Motiva refinery in Norco, Louisiana, underwent planned maintenance the week ended December 20. Additionally, a 51,500 b/d reformer at Citgo's Corpus Christi, Texas, refinery was shut for repairs the week ended December 20 after a fire.
These outages were partially offset by the return of a reformer and a hydrocracker at Chevron's 330,000 b/d Pascagoula, Mississippi, refinery.
On the U.S. West Coast, Tesoro shut a major unit at its 166,000 b/d Golden Eagle refinery in Martinez, California, the week ended December 20.
Meanwhile, U.S. distillate stocks are expected to have dropped 500,000 barrels the week ended December 20.
"We think that this is a December like no other," Larry said, referring to increased runs combined with steady product demand. "We have never had a situation where we were drawing down so much crude on these pipelines and seen demand for products on the upswing."
That said, analysts on average expect U.S. gasoline stocks rose by 1.2 million barrels the week ended December 20.
Larry was in the minority, expecting a 1.5 million-barrel draw.
"If the economy continues to push on, and we see job creation keep up with this pace, we're going to run into some serious demand come spring," he said. "A draw this week on higher demand and lower production will give us a clue.”
Source: Platts