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Weekly US oil data
Softer demand and no inventory draw
Bearish, at least incrementally, best describes this morning’s weekly oil data release
for the US. This is also the third less than bullish weekly batch of numbers in a row.
On the demand front, single week numbers signal a sharp correction down to below
19 million barrels per day.
These weeklies go against the grain of the more complete and more reliable monthly
US oil data. Latest monthlies, for September, showed US oil demand rising +4.9%,
y/y, which was nearly 3 percentage points more than the weeklies had suggested,
and which was also the third such substantial upward revision of weekly data in a
row. 3Q oil demand in the US was +4.1% higher than in 3Q2009, and nearly half a
million b/d higher than in the second quarter.
The weeklies also go against the strengthening trend of global oil fundamentals. Oil
demand growth globally accelerated in the third quarter, and even though we expect
things to slow down some in 4Q and 2011, that slowdown should still leave us with
above trend growth, as we explained in our monthly, see ―Oil prices and
fundamentals: Bridging the data and price gap” 24 November 2010.
Upside oil price risk
Indeed markets today and this week (up more than US$2/b at time of writing)
illustrate that risks to our price forecast are fast shifting further to the upside.
Top three numbers in today’s weekly US oil data
Crude oil inventories increased by +1.1mbls. Gulf Coast inventories rose
substantially, +2.7mbls. Stocks fell marginally elsewhere, except for another 3%
increase at Cushing. Low and falling imports remain the more constructive
element in the moving parts behind the inventory data
Total oil products inventories moved sideways. Perhaps the most bearish,
given seasonally low refiner throughput, is that the absence of a material draw on
product stocks confirms soft demand.
Demand growth decelerates sharply – at least in single week numbers.
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