The latest weekly stats, the Platts survey for the week ending February 3 calls for a 2.25 million barrel gain in crude oil supplies, a 200,000 barrel decline in distillate stocks, and a 1.25 million barrel increase in gasoline inventories. The latest Reuters survey calls for a 2.6 million barrel rise in crude oil supplies, a 600,000 barrel fall in distillate stocks, and a 200,000 barrel gain in gasoline inventories. With regard to crude oil, our cursory cut at the data would suggest, assuming steady production and refinery runs in combination with a slight decline in gross imports, a stock build somewhat less than consensus expectations. We estimate that implied distillate demand should have rebounded last week to 3.8+ MMB/D despite the weather as diesel demand reverts to our expected underlying mean. With steady supply, however, our scenario would still imply little change in total distillate inventories last week. For gasoline, we would look for a rebound in implied demand back above 8.0 MMB/D, with gross imports retracing from the previous week’s average exceeding 1.0 MMB/D. Nonetheless, with steady refinery output our arithmetic would imply a stock build in between the Reuters and Platts estimates, i.e. around 700,000 barrels.
For the week ending January 13 the latest Platts survey is looking for a 2.6 million barrel build in crude oil stocks, a 1.4 million barrel rise in distillate supplies, and a 3.0 million barrel gain in gasoline inventories. Looking first at crude oil, right or wrong we would look for a retracement in imports from the prior week’s above-trend rate, and steady runs. With domestic crude oil production continuing to average modestly below 5.9 MMB/D, our arithmetic would suggest a gain in stocks smaller than consensus expectations.
The neopress is pointing out that U.S. crude stocks stand at the lowest level since the week ending December 26, 2008. At that time, the prompt NYMEX crude oil contract was trading under $40.00 per barrel reflecting the global financial meltdown and recession, so low stocks were obviously not much of a factor in price determination. In addition, at that time the days supply of crude oil, more relevant than the absolute level, stood at 22.5. Last week’s days supply was 22.2, so not that far from the December 2008 value. Also, if we look at DOE month-end data for the last several years, U.S. crude stocks have been far lower than they were last week. For example, if we look back at this decade, the lowest we see is only 18.1 days at end-August 2003. At that time the prompt NYMEX crude oil contract was trading around $31.00 per barrel. Of course, we can also fast forward to June 2008, when end-June stocks stood at a modestly higher 19.3 days and the prompt NYMEX crude contract was trading at $140.00 per barrel.
The DOE states the weekly data will be released as customary on Wednesday morning. In this
regard, the latest Platts survey is looking for a 1.0 million barrel build in crude oil stocks, a 1.5 million
barrel decline in distillate supplies, and a 1.5 million barrel build in gasoline inventories. Our cursory cut at
the data would suggest that crude oil runs were steady to up modestly, domestic crude oil production
averaged close to 5.9 MMB/D, but gross imports recovered from the prior week. Nonetheless, our
arithmetic yields a modest crude oil stock draw. For distillate, we would look for a further easing in
implied demand to around 4.0 MMB/D. Gross imports should ease somewhat, refinery production about
steady, while gross exports remain quite healthy. We would look for a distillate stock decline somewhat
smaller than consensus expectations. Finally, despite an expected modest recovery in implied demand from
the prior week and a retracement in both gross imports and refinery output, our numbers suggest a larger
gasoline stock build than the market is looking for.
US Crude Stocks- Up 1.344 MB (Cushing Stocks – Up 0.532 at 30.321 MB)
US Gasoline Stocks- Down 4.134 MB
US Distillate Stocks- Down 2.929 MB
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US Crude Stocks- UP 1.915 MB (Cushing Stocks – Down 1.078 at 30.92 MB)
US Gasoline Stocks- Up 0.791 MB
US Distillate Stocks- UP 0.072 MB
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US Crude Stocks- Down 3.963 MB (Cushing Stocks – Down 0.396 at 32.689 MB)
US Gasoline Stocks- Up 0.199 MB
US Distillate Stocks- Up 0.709 MB
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The latest Platts survey for the week ending September 2 is looking for a 1.7 million barrel decline in crude stocks, a 900,000 barrel fall in gasoline supplies, and a 600,000 barrel gain in distillate inventories. In terms of crude oil, the DOE indicates that the last SPR barrels were picked up as of September 1, and thus assuming a concurrent transfer we would include another 5.4-odd million barrels into commercial inventory. Allowing for production shut ins and some reduction in imports, our arithmetic would suggest basically no change in crude oil stocks, taking into account the PAD I refinery run cuts as a result of Irene. For gasoline, as previously discussed we would look for some retracement in implied demand from the week before reflecting the halt in pre-Irene precautionary secondary stock building and reduced driving due to flooding. Allowing for a fall in refinery output, our numbers would still suggest a modest build in gasoline supplies. Finally, for distillate, lower refinery production was also likely accompanied by a decline in implied demand, but not to the degree of gasoline due to the use by portable generators to compensate for electricity grid outages. We believe distillate stocks rose more than the market expects.
US Crude Stocks- Up 5.281 MB (Cushing Stocks -0.577 at 33.085 MB)
US Gasoline Stocks- Down 2.975 MB
US Distillate Stocks- Up 0.363MB
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Hornsby Trading News
- Platts Energy Inventory Survey Plus Hornsby & Company Inventory Assessment – February 7th.
- US NATURAL GAS INVENTORY SURVEY: Draw Of 126 Bcf Expected – Dow Jones
- Weekly DOE Inventory Report – February 1st.
- API Inventory Report – January 31st.
- Platts Energy Inventory Survey Plus Hornsby & Company Inventory Assessment – January 31st.