Extract from crude oil:
US crude stocks built by 2.2 mb to 457 mb, driven by exports plunging to below 0.9 mb/d (from 2.1 mb/d in the prior week), although this is lower than various tanker tracking estimates. As a result, PADD 3 stocks rose by 1.6 mb. Despite this small build, October crude stocks drew by 8.4 mb, compared to the five-year average of a 16 mb build. We expect draws to continue through November (-13 mb) and December (-18 mb), especially as runs start to recover (last week runs rose by 0.3 mb/d to 16.3 mb/d). We maintain our view that exports will have to come off from October’s average levels of 1.7 mb/d as sustaining such levels of exports alongside supporting runs above 17 mb/d in December will push PADD 3 stocks below operational minimums.
Extract from oil products:
US gasoline stocks dropped by 3.3 mb to 209.5 mb, down by more than 20 mb from the week before Hurricane Harvey and dropping below the five-year average for the first time since 2015. Draws were again led by PADD 1 as imports into the USEC dropped to 0.37 mb/d. Stocks also fell in PADDs 2 and 3, with the former drawing stocks for the seventh straight week amid refinery maintenance and an unplanned outage of the Explorer pipeline. However, Chicago prices, which surpassed 30 cents per gallon premiums to RBOB last week, have fallen back now that service on the Explorer pipeline has been restored and regional refineries are returning from works. While this will help to back out supplies from PADD 1, a broader correction in gasoline prices could still be a few weeks away given that resupply from Europe amid a strong pull from the East remains stubbornly low and export demand from countries such as Mexico remains robust.