US crude oil inventory draws expected to extend amid steady exports
US crude oil inventories likely declined during the week ended Jan. 15 as exports remained steady, an S&P Global Platts analysis showed Jan. 19.
Total commercial crude oil stockpiles are expected to have moved 2.5 million barrels lower last week to around 479.7 million barrels, analysts surveyed by Platts said.
The expected draw would mark the sixth consecutive week of falling crude stocks and leave inventories less than 8% above the five-year average of US Energy Information Administration data, the narrowest surplus since late November.
US crude exports averaged 3.03 million b/d last week, data from cFlow, Platts trade-flow software, showed, up slightly from an EIA-reported 3.01 million b/d the week prior. When taken together, the Platts cFlow and EIA data show that US crude exports have averaged around 3.2 million b/d to-date in 2021, up from a December average of around 2.9 million b/d.
Exports to Asia fell to a three-week low 770,000 b/d, Platts cFlow data showed, down sharply from a recent peak of 2.49 million b/d seen during the week ended Jan. 8. US exports to China notably fell to zero for the first time since the week ended Dec. 11, Platts cFlow data showed.
But exports to Europe surged 65% on the week to 680,000 b/d.
The uptick in European-bound cargoes may be reflective of a wider Brent-WTI spread seen in late 2020, when cargoes loaded last week were likely booked. Front-month NYMEX WTI maintained a roughly $3.15/b discount to ICE Brent in December, up from $2.43/b in November and $1.97/b in October.
US refinery utilization averaged around 81.2% of the total capacity, analysts said, a 0.8 percentage point decline from the 20-week high 82% seen the week prior. Notably, the expected pullback is well below a 1.8 percentage point decline that is typically seen in mid-January, leaving runs less than 11% behind the five-year average, the weakest deficit since early October.
Refinery margins continued to trend higher last week, driven in large part by steep gains in gasoline cracks. US Gulf Coast WTI MEH cracking margins averaged $8.30/b in the five days ended Jan. 15, according to Platts Analytics, up from a month-to-date average of $7.77/b.
Over the same period, the unleaded 87 gasoline crack versus WTI MEH averaged $9.26/b, up from $8.58/b to date this month and well above December levels of $5.94/b.
Apple mobility data shows US driving activity climbed for a second straight week last week, edging up 0.8% from the week prior.
Nationwide gasoline stockpiles are expected to be 2.7 million barrels higher at around 248.2 million barrels, analysts said. The build would leave stocks 1.1% behind the five-year average — the largest deficit since May 2019.
The regional gasoline supply picture remains mixed. Inventories have been well behind the five-year average in the USGC and Midwest since December, but the EIA reported healthy surpluses of 5.7% and 3.6% on the US Atlantic and West coasts, respectively, as of the week ended Jan. 8.
Distillate inventories are expected to have climbed 600,000 barrels last week, analysts said. The counter-seasonal build would put it 7.5% above the five-year average, up from 6.7% the week prior.