Extract from crude oil:
US crude stocks fell by 6.9 mb w/w to 416.1 mb, with the draws exceeding the five-year average draw for the week of 2.5 mb. As a result, crude stocks are now below the five-year average. A jump in exports to 3.3 mb/d helped underpin the draws, as did a 0.11 mb/d w/w increase in refinery runs to 17.5 mb/d. Imports were down by 0.18 mb/d to 6.7 mb/d and even though imports into the USGC rose to nearly 1.8 mb/d, stocks in PADD 3 drew by 2.4 mb. Overall, US crude stocks have now fallen by 67 mb since May, the lowest level since September 2018.
However, seasonal crude builds are upon us as refineries are set to undergo works between September and November, before steep stockdraws return in December. The builds should peak in October at 13.2 mb due to heavy maintenance across the USGC and the Midwest. Several USGC refineries will undergo works—including the 0.61 mb/d Motiva Port Arthur, 0.28 mb/d Shell Deer Park and 0.37 mb/d ExxonMobil Beaumont—reducing primarily sour crude demand in the Houston, Nederland and Beaumont areas. In the eastern Gulf of Mexico, Marathon’s 0.56 mb/d Garyville and ExxonMobil’s 0.50 mb/d refineries also have work scheduled. The planned work in Louisiana could keep a lid on Mars and SGC grades until turnarounds subside.
Extract from oil products:
US gasoline stocks fell by 0.7 mb w/w as inventories in PADD 1 began to draw ahead of the switch to winter grade fuel later this month. USEC stocks dropped by 1.3 mb w/w to 63.7 mb, leaving inventories 3.1 mb lower y/y despite US gasoline imports rising by 80 thousand b/d w/w to 0.8 mb/d. USGC gasoline stocks fell by 0.8 mb w/w as exports remained heavy on strong demand from Latin America. Midwestern gasoline stocks rose by 1.6 mb w/w to 53 mb, just 0.1 mb lower y/y. US-wide inventories are likely to remain under pressure until mid to late October with refinery maintenance expected to be underway earlier than usual in the Atlantic basin due to both IMO 2020 and the expiry of most US gasoline sulphur credits at the end of the year.