Platts pre-report analyst survey of EIA/API estimates suggests a draw of 3 million barrels in U.S. oil stocks Platts Survey Crude oil inventories down 3 million barrels Gasoline inventories down 1.1 million barrels Distillates inventories up 1.7 million barrels Refinery utilization or run rate up 0.25 percentage point to 89.45% New York - July 15, 2008 Analysts expect a 3 million-barrel draw in U.S. commercial crude stocks to be revealed when the U.S. Energy Information Administration (EIA) and American Petroleum Institute (API) release weekly data on Wednesday, a Platts survey showed Tuesday. "The combination of low U.S. crude imports and high storage costs will likely keep the recent trend of steep stock declines intact," said Linda Rafield, Platts senior oil analyst and editor of Platts Futures & Derivatives Review. "Storage costs are currently twice that of the contango* at the front of the crude futures curve, which will likely deter stock building." Crude imports in the week ending July 4 were an abnormally-low 9.5 million barrels per day (b/d), with most of the drop occurring on the West Coast. With gross inputs near 15.7 million b/d, it's believed that imports would have to rebound back to the previous week's 10.2 million barrels to temper a stock draw. With refinery utilization expected to edge up 0.25% to 89.45%, based on last week's EIA report, and with imports steady, crude stocks will likely continue to drop. Analysts also expect a decline of 1.1 million barrels in gasoline inventories. "With refiners favoring distillate yields, gasoline output is expected to remain at unseasonably low levels," Rafield said. The New York Mercantile Exchange heating oil crack spread has been running at an average $22/barrel premium to the RBOB crack, providing the economic incentive to maximize distillate output. In terms of middle distillates levels, analysts project a build of 1.7 million barrels. *Contango is when nearby prices are lower than later months.
Analysts expect a 3 million-barrel draw in U.S. commercial crude stocks to be revealed when the U.S. Energy Information Administration (EIA) and American Petroleum Institute (API) release weekly data on Wednesday, a Platts survey showed Tuesday.
"The combination of low U.S. crude imports and high storage costs will likely keep the recent trend of steep stock declines intact," said Linda Rafield, Platts senior oil analyst and editor of Platts Futures & Derivatives Review. "Storage costs are currently twice that of the contango* at the front of the crude futures curve, which will likely deter stock building."
Crude imports in the week ending July 4 were an abnormally-low 9.5 million barrels per day (b/d), with most of the drop occurring on the West Coast. With gross inputs near 15.7 million b/d, it's believed that imports would have to rebound back to the previous week's 10.2 million barrels to temper a stock draw. With refinery utilization expected to edge up 0.25% to 89.45%, based on last week's EIA report, and with imports steady, crude stocks will likely continue to drop.
Analysts also expect a decline of 1.1 million barrels in gasoline inventories. "With refiners favoring distillate yields, gasoline output is expected to remain at unseasonably low levels," Rafield said. The New York Mercantile Exchange heating oil crack spread has been running at an average $22/barrel premium to the RBOB crack, providing the economic incentive to maximize distillate output.
In terms of middle distillates levels, analysts project a build of 1.7 million barrels.
*Contango is when nearby prices are lower than later months.