Extract from crude oil:
US crude stocks rose by 6.2 mb last week to 436 mb, compared to the usual 0.7 mb draw. However, most of the build (4.9 mb) was in the logistically isolated PADD 5, with stocks in PADD 2 unchanged w/w and PADD 3 building by just 0.7 mb, underpinned by a 0.1 mb/d w/w fall in refinery runs and exports easing by 0.2 mb/d. Moreover, even with this build, US crude stocks have risen by less than 11.5 mb so far this year, compared to the five-year average build of 58 mb. Stock changes rarely occur in a straight line, so this week’s builds do not change our view on our overall US draw profile, which we expect to average 8.7 mb in May, 23.6 mb in June and 15.0 mb in July. That said, the builds in PADD 5 may continue in the near term, as Saudi Arabia seems to be sending more crude to the US (0.15-0.20 mb/d more compared to the last six months, cutting Asian volumes in turn) as US refiners, particularly in PADD 5, have allegedly nominated more Saudi barrels, likely to compensate for Venezuelan losses.
Extract from oil products:
US gasoline stocks rose by 1.2 mb w/w to 238 mb. Over the past five years, stocks have typically risen in late April though a spate of imports from Europe has accentuated stockbuilds in recent weeks. Imports into the USEC have averaged 0.65 mb/d over the past four weeks, and arrivals should remain elevated at around 0.7 mb/d over the next few weeks, so summer cracks have failed to perk up even with unplanned disruptions in Canada and the USGC. PADD 1B stocks remain 1.8 mb lower y/y at 33.6 mb despite a 0.9 mb w/w build leaving the market vulnerable to outages, though this may not be felt until later in the summer when demand is stronger. The reported shutdown of Colonial lines 3, 4 and two stub lines could provide some catalyst for tighter US gasoline markets if the shutdown is prolonged.