Extract from crude oil:
US crude stocks rose by 2.2 mb last week, compared to the five-year average build of 1.7 mb. Still, in the year-to-date, stocks have risen by less than 5.3 mb, the lowest build this decade, perhaps longer, vs the five-year average build of 58.3 mb and last year’s build of 58.4 mb. Total commercial stocks rose by 1.4 mb, compared to the five-year average build of 8 mb, widening the deficit to the five-year average to 17.3 mb. The crude builds were driven by refinery runs falling by 0.33 mb/d to 16.6 mb/d, led by works in PADD 3. Several unplanned outages will keep a cap on refinery runs in the near term—reformer issues cutting runs at Borger are of particular note as that pushed WTI-Midland differentials to WTI to double digits this week, given pipelines out of the Permian are already full. That said, record high exports of 2.3 mb/d (with a large share of these earmarked for Europe, weighing heavily on Med crude grades, especially as European refineries are in peak refinery maintenance this month and next) helped offset lower runs and a 0.64 mb/d w/w rise in PADD 3 imports, helping to keep USGC stocks flat w/w. The bulk of the stockbuilds were in PADD 2 (1.5 mb), with Cushing stocks up by 0.5 mb to 35.4 mb.
Extract from oil products:
US gasoline stocks rose by 0.8 mb w/w to 236.8 mb, led by PADD 3, where inventories rose by 1.5 mb w/w despite a drop in regional runs and a slight recovery in regional exports. Regional gasoline supplies should further tighten following last week’s explosion at Valero’s Texas City refinery that has shut the FCC and alkylation unit. Runs at the Borger refinery have also been trimmed following a reformer issue leading to supply shortages in the Texas Panhandle. PADD 1 stocks rose w/w as imports into the USEC rose to their highest weekly level since August 2017. However, USEC stocks remain 7.1 mb lower y/y and inventories drew by almost 1.0 mb w/w in PADD 1B. While imports should remain elevated over the next few weeks, FCC issues at Irving’s Saint John refinery and Phillips 66’s Bayway plant are improving short-term fundamentals, and, with PADD 1 inventories still low, the market appears vulnerable to further outages.