Extract from crude oil:
US crude stocks fell counter-seasonally by 1 mb to below 428 mb, compared to the usual five-year build of 2.2 mb, taking stocks lower y/y by 105 mb and only marginally higher than 2014 levels. Perhaps more importantly, total commercial inventories plunged by 10.6 mb and moved below the five-year average for the first time since 2014. The real tightness is in products, but crude stocks have hardly built so far this year either, though with peak runs ahead of us, strong stockdraws should be supported. Ultimately, even with record US production, domestic stocks have not built, thanks to record exports (which jumped by 0.54 mb/d w/w to 1.75 mb/d last week). Last week, the draws were concentrated in PADD 3, where stocks fell by 1.5 mb, even with a 70 thousand b/d w/w decline in runs, as lower imports and higher exports compensated. Cushing stocks fell by 1.1 mb to below 35 mb, bringing month-to-date draws to 0.3 mb.
Extract from oil products:
US gasoline stocks fell by 3.0 mb w/w to 236.0 mb. PADD 5 led the draws (-1.0 mb w/w), mirroring recent strength in west coast gasoline differentials. Despite domestic runs remaining relatively elevated at 16.95 mb/d and exports slowing to a seven-week low of 0.65 mb/d, w/w stockdraws of 0.8 mb in PADD 2 and 0.7 mb in PADD 3 suggest that, despite Mexican buying appearing to ebb in April, there are alternative outlets for USGC production for now. Despite relatively high imports, USEC stocks also drew, albeit by a more modest 0.3 mb, with stocks in PADD 1B broadly flat w/w. Inflows from Europe should remain high in the coming weeks and, with the latest weekly demand number looking more of an outlier rather than a new base, upcoming refinery maintenance looks the main hope to balance supplies in the short run.