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 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.
In terms of the data for the week ending June 3, the latest Reuters survey is looking for a 600,000 barrel draw in crude oil supplies, a 1.1 million barrel build in gasoline stocks, and a 200,000 barrel gain in distillate inventories. Our cursory cut at the numbers would suggest a somewhat more modest crude oil draw and a larger build in gasoline supplies, assuming some retracement in implied gasoline demand from the previous week. For distillate, we believe another small draw could occur, but once again we should be close to the inflection point where stocks begin to rebuild once again
The NYMEX may take some form of cue from the weekly DOE data due out tomorrow, but we sense the numbers would have to be a complete shock in either direction to provide any form of sea change in sentiment. The latest Reuters poll is looking for a 1.5 million barrel fall in crude oil stocks, a 1.1 million barrel increase in gasoline supplies, and a 100,000 barrel gain in distillate inventories. When we take a look at crude oil for the week ending May 27, we expect a modest uptick in refinery crude oil runs combined with a modest falloff in gross imports. Our arithmetic would imply a stock draw somewhat larger than consensus expectations. For gasoline, we expect implied gasoline demand to have been about steady with the prior week at 9.0 MMB/D or so, while refinery production increased on a seasonal basis. However, given the high level of gross imports for the week ending May 20, we would expect a significant falloff in gasoline imports to have occurred last week. The net result, however, is a gasoline stock build greater than market estimates. Finally, for distillate the key once again will be implied demand, which recovered to almost 4.0 MMB/D for the week ending May 20. As previously discussed, the recovery “normalized” inordinately weak demand reported for the previous couple weeks, thus suggesting that it would be premature to assume a material slowdown in manufacturing growth at this time. Nonetheless, we would look for implied demand to fall back once again, but still average around 3.7 MMB/D or so to avoid raising any flags again. Assuming roughly steady supply, yet one more time we would look for a stock draw in contrast to consensus expectations of a build, but relatively small in magnitude as we approach the inflection point when stocks begin to seasonally increase once again.
In terms of U.S. data for the week ending April 22, the latest Platts survey is calling for a 1.6 million barrel build in crude oil stocks, a 1.5 million barrel fall in gasoline supplies, and a 650,000 barrel increase in distillate fuel oil inventories. Our stab at the numbers would suggest a crude oil stock build close to consensus expectations and a gasoline draw smaller than what the market is looking for. We also expect another decline in distillate supplies, despite the likelihood that implied demand fell back from the prior week’s above-trend average of more than 4.1 MMB/D.
