Platts survey is looking for a 1.0 million barrel decline in crude oil stocks for the week ending January 6, a 1.35 million barrel rise in distillate supplies, and a 1.75 million barrel increase in gasoline inventories. In terms of crude oil, we had mentioned last week that stocks rose contrary to the mean of historical experience for the last reporting period of the year, but that technically there was one day left in 2011 when a tax-related draw on the Gulf Coast may have occurred. We will assume so, and as such our guesstimates would yield a decline in crude stocks last week exceeding consensus expectations. For refined products, we believe the odds should heavily favor a recovery in implied distillate demand such that the latest four-week average reverts back to our mean given our estimate of manufacturing activity. Assuming a slight decline in supply, we believe stocks fell slightly last week, contrary to what the market expects. For gasoline, we believe implied demand also recovered last week, though less so than distillate, and with a decline in imports we would estimate a draw in gasoline stocks. Thus, if our assessment is anywhere close, the market will likely wish to build on gains over the extreme short term, but then progressively respond to the recovery in crude stocks that should characterize the first quarter.
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