Extract from crude oil:
US crude stocks drew counter-seasonally last week, by nearly 5 mb to below 420 mb, lower y/y by 64 mb and only 31.6 mb above the five-year average, once adjusted from 66 mb higher by taking into account linefill of 34 mb since 2014. Across December 2017, US crude stocks drew by 25.8 mb, and we expect elevated exports to help offset surging production growth in 2018, given the strong pull on US crudes from the rest of the world. As long as global oil demand continues on its current growth trajectory, absorbing the average export level of 1.5 mb/d that we expect through this year will not dent the strength in the rest of the world. Last week’s draws were helped by freeze-offs that offset a 0.30 mb/d w/w drop in runs and a 0.46 mb/d w/w fall in exports. Imports also eased, to below 7.7 mb/d, with waterborne flows likely affected by intermittent ship channel closures due to inclement weather. As a result, PADD 3 stocks fell by 2.6 mb while PADD 2 stocks dropped by 3.2 mb.
Extract from oil products:
Despite significant disruptions from winter storms, US gasoline stocks rose by slightly less than seasonal norms, up by 4.1 mb w/w to 237.3 mb. As a result, stocks were 0.6 mb below the five-year average, which is the first time that inventories have been in a deficit since late November 2017. PADD 1 led the gains, with stocks rising by 3.2 mb w/w. Still PADD 1 inventories held below the five-year average and imports into the region fell back once again. Last week’s storms pushed USEC imports to an 11-week low of 0.24 mb/d, and while backed-up cargoes may boost volumes this week, European departures have remained low with transatlantic arbs shut on paper. Improving weather and increased refinery maintenance later in the month should ensure that builds begin to moderate, helping set the scene for a constructive spring.