US crude, gasoline stocks expected to keep falling as demand grows
The weekly streak of US crude oil inventory draws likely extended to eight for the week ended July 9 amid the busier summer driving season and an expected uptick in refinery demand, analysts surveyed by S&P Global Platts said July 12.
Total US commercial crude oil stocks likely declined by 4.9 million barrels to 440.6 million barrels, analysts said. The draw would leave stocks nearly 7% behind the five-year average of US Energy Information Administration data and the lowest since the week ended Jan. 31, 2020.
The eight-week streak of declines would leave stocks down by nearly 50 million barrels from mid-May.
The draw comes as refinery utilization is expected to average roughly 92.5% of capacity, up more than 0.3 percentage point from the week prior following an unexpected decline at the beginning of July. Refinery utilization is back to pre-pandemic levels and about almost 2.5% above the five-year average.
But while utilization rates have been above normal since late May, refinery crude demand has continued to lag historic norms. Total net crude inputs are forecast by S&P Global Platts Analytics to average 16.26 million b/d in the week ended July 9, up around 140,000 b/d from the week prior but still less than 2% behind the five-year average of EIA data.
However, for the week ended July 2, US domestic crude production rose to a 14-month high of 11.3 million b/d with oil futures trading well above $70/b.
Platts Analytics expects crude imports to increase slightly to 6 million b/d, while deflated exports markets also should rise to 2.9 million b/d.
Following the July 4 summer travel spike, US gasoline demand is expected to soften from its recent high to 9.42 million b/d for the week ended July 9, according to Platts Analytics. The gasoline refining output is expected to rise to 8.26 million b/d as refiners adjust gasoline yield up to 50.8%.
Gasoline draws continue too
The stronger driving demand likely offset the higher refinery runs and contributed to gasoline inventory draws last week.
Analysts surveyed by Platts saw gasoline stocks dip by 1.6 million barrels lower in the week ended July 9, putting inventories at about 233.9 million barrels. The expected draw would put inventories at a five-week low but still near the five-year average.
Platts Analytics expects gasoline imports will decrease slightly to about 1 million b/d while exports are roughly flat at 900,000 b/d.
On the other hand, total distillate stocks likely climbed in the week ended July 9, up by 1.3 million barrels to about 140 million barrels, analysts said. Despite the build, inventories would still fall nearly 5% behind the five-year average.
Distillate imports are set to rise to 140,000 b/d, while exports should fall slightly to 1.2 million b/d, Platts Analytics projects.