Extract from crude oil:
US commercial crude stocks fell by 2.2 mb w/w last week, leaving total crude stocks 89 mb lower y/y at 434 mb. The draws were mostly focussed in PADD 3, where stocks fell by 2.5 mb w/w. Cushing stocks rose by 1.4 mb w/w last week, but we still expect these inventories to draw by 2.4 mb this month. Imports plummeted by a massive 1.2 mb/d w/w to 7.3 mb/d as combined arrivals from the Middle East dropped by 0.63 mb/d w/w to 1.3 mb/d and those from LatAm declined by 0.33 mb/d w/w to 0.76 mb/d (Venezuelan arrivals were down by 0.1 mb/d w/w at just 0.39 mb/d). The drop in imports offset lower runs (-75 thousand b/d w/w, driven by PADD 3), lower exports (-0.27 mb/d w/w), higher production (the EIA’s weekly model estimated 91 thousand b/d of w/w Lower-48 growth) and a 0.7 mb SPR release (we estimate there is still some 4 mb to be released across May). Surprisingly, imports of Canadian crude fell by 75 thousand b/d w/w to average 3.7 mb/d last week. However, this is still higher y/y by almost 0.4 mb/d and is likely reflective of short-term volume fluctuations on these long-haul pipelines (due to batch changes etc.), rather than producers lowering production in response to tight takeaway.
Extract from oil products:
US gasoline stocks fell for the first time in three weeks, by 2.2 mb w/w to 235.8 mb. PADD 3 led the draws, with USGC inventories declining by a sizeable 2.7 mb w/w despite the weekly export estimate hitting its lowest level since October 2017 at just 0.58 mb/d. The slow recovery in Mexican refinery utilisation in recent months has somewhat reduced the country’s import requirements, though we still generally expect shipments to remain relatively elevated. Indeed, PMI fixed around seven cargoes last week to move gasoline from the USGC to Mexico, but exports are unlikely to remain at such levels in the coming weeks. Some PADD 3 exports are also being pushed to southern hemisphere markets, including Australia, due to the low cost of butane. While overall stocks fell, PADD 1 inventories rose for a third straight week, up by 1.8 mb w/w as imports into the USEC remained elevated at 0.66 mb/d. Arrivals into PADD 1 should stay high in the coming weeks, but regional stocks remain 5.9 mb lower y/y and the latest w/w build was concentrated in PADD 1C, with stocks around New York Harbor holding broadly steady.