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Weekly US oil data
Deceptive headline numbers
The shoulder period for crude in the US seems to be coming a bit later in the season
than usual. This week‟s +4.9% leap in refiner utilization levels signals that
maintenance has concluded, and we will likely see a shifting from one inventory
category to another until we hit peak winter demand. In essence, there is still room to
build inventories from levels that are already significantly above long-term averages.
What‟s more, Cushing has historically built +2.4mbls in December, and we expect
this trend to hold in upcoming weeks.
This week‟s data is somewhat neutral, marking a transition point. The increasing
refinery runs lead us to be somewhat constructive on crude, while bearish on
products, at least in the shorter term.
OPEC meets in Ecuador this weekend
Despite the recent price action, we believe it unlikely that official production quotas
will be raised. If anything, we think the Saudis (and others) will counter US$90+/b
prices with stealthy, undisclosed increases in production, much like they allegedly
did this past summer.
Top three numbers in today’s weekly US oil data
Crude oil inventories decreased by -3.8mbls Each region saw draws, though
they were mostly concentrated on the Gulf and West Coasts, which fell -1.9mbls
and -1.5mbls, respectively, while Cushing stocks added +0.4mbls w/w. Imports
saw an increase of +607kb/d, and utilization rates jumped a sizeable +4.9% to
87.5%.
Total oil products inventories dropped, but gasoline and middle distillate
stocks increased. The total oil products draw of -1.5mbls w/w was driven by a
-7.5mbls decrease in the “other products” category.
Demand growth in the single week numbers rebounds from quite bearish
results last week, though the 4-week moving average shows a smaller uptick in
growth to +2.9% y/y
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