Steady crude runs should weigh on US crude supplies: survey
US commercial crude stocks are expected to have fallen 2 million barrels for the reporting week ended May 17, according to an S&P Global Platts survey.
This would mark the third weekly decline in the past 10 weeks, a period in which US crude stocks have risen nearly 33 million barrels. At just over 472 million barrels for the week ended May 10, US crude stocks sit 3.43% above the five-year average of US Energy Information Administration oil data.
This time last year, crude stocks were more than 2.3% below the five-year average.
Analysts expect a 0.5 percentage point increase in US refinery utilization rates; a rise of this size would put US refineries operating at 91% of capacity, their strongest levels since late-January.
S&P Global Platts Analytics last week issued a forecast for US crude runs — which makes up the bulk of the refinery utilization number — to hold firm at around 16.7 million b/d when fresh EIA oil data is released Wednesday.
Platts reported last week that ExxonMobil extended planned work at its 238,600 b/d Joliet refinery in Chahannon, Illinois, triggering a boost in Chicago ULSD differentials. Chicago ULSD was last assessed at NYMEX ULSD plus 1 cent/gal Friday, up from minus 1 cents/gal the Friday prior.
Analysts surveyed expect US distillate stocks to have fallen 1 million barrels last week. Platts Analytics said Wednesday that wet weather has “severely delayed plantings this spring, which, in turn, has postponed farm diesel purchases.”
“BP at Whiting still has a crude unit in maintenance. They’ve been a buyer of ULSD,” a trader said last week in response to the Joliet news.
Analytics said that a spate of dry weather in the Midwest last week would “significantly pick up the pace of corn plantings,” which should provide a boost US distillate demand.
Gasoline stocks are expected to have increased by 1 million barrels, according to analysts surveyed.
The trader also said that Joliet is still undergoing maintenance on a FCC unit.”
“They’ve been a buyer of gasoline,” a trader said.
Chicago CBOB differentials rallied last week to NYMEX RBOB plus 45 cents/gal in the wake of the reports, but have since cooled off, closing at plus 18.75 cents/gal Friday.