Crude prices lower after inventory report

November 2, 2016 10:49 AM
Weekly Energy Markets Report

The enerygy complex is trading lower after the EIA released its latest weekly oil inventory report. The data showed Total Crude & Product stocks increased by 9.047/mmbls to 1340.731/mmbls for week ending Oct 28. Looking at the year-on-year for Total Crude & Product stocks we see we are now 70.2/mmbls above last year’s level for this time of the year and above the five-year average by 229.1/mmbls.

Crude oil stocks increased by 114.420/mmbls to 482.578/mmbls, which was more than our projections looking for a build of around 2.2/mmbls for the week under review. Looking at the year-on-year we are running at 31.7/mmbls above last year’s level for this time of the year and 118.7/mmbls above the five-year average. When we look at the PADD breakdown we saw a mostly higher picture with PADD I showing a draw of 162,000/bbls to 18.018/mmbls while PADD II showed a build of 2.728/mmbls to 138.933/mmbls. Cushing, Okla., showed a build of 89,000/bbls to 58.451/mmbls and PADD III showed a build of 8.107/mmbls to 251.496/mmbls. PADD IV showed a build of 659,000/bbls to 23.972/mmbls and PADD V showed a build of 3.090/mmbls to 50.160/mmbls.       

On the gasoline side of the data the EIA reported that gasoline stocks decreased by a 2.207/mmbls to 226.011/mmbls, which was more than our projections looking for a draw of around 1.5/mmbls. Looking at the year-on-year for gasoline stocks we see that we are above last year’s level for this time of the year by 8.5/mmbls and we are above the five-year average by 17.1/mmbls. On the distillate side of the report distillate stocks showed a draw of 1.828/mmbls to 150.550/mmbls, which was less than our projections looking for a draw of around 2.2/mmbls. Looking at the year on year for distillate stocks we see that we are above last year’s level by 9.8/mmbls and we are 24.1/mmbls above the five-year average. 

When we look at the breakdown for distillate stocks we see that diesel stocks decreased by 1.946/mmbls while heating oil stocks increased by 118,000/bbls. On the refining side of the report refinery runs decreased 0.4% to 85.2% for the week under review. Looking at the year-on-year for refinery runs we see that we are below last year’s level by 3.5% and we are below the five-year average by 1.2%. 

On the import side of the report we saw that imports were mixed for week ending Oct. 28. Imports of crude oil increased 1.979 to 8.995/mmbls. Imports of gasoline stocks decreased by 375,000/bbls to 458,000/bbls. Imports of distillate stocks decreased by 14,000/bbls to 60,000/bbls for the week under review. Imports of jet fuel increased by 3,000/bbls to 93,000/bbls. Total Imports increased by 1.889/mmbls to 10.957/mmbls.

On the demand side for the data we saw a mixed picture for implied demand for week ending Oct. 28. Implied gasoline demand increased by 65,000/bbls to 9.183/mmbls per day bring the year on year to 1,000/bbls below last year’s level. Gasoline demand is above the five-year average by 260,000/bbls. Implied distillate demand decreased by 303,000/bbls to 3.863/mmbls per day bring the year on year to 143,000/bbls below last year’s level. Implied distillate demand is below the five-year average by 127,000/bbls. Implied jet fuel demand increased by 242,000/bbls to 1.789/mmbls per day for the week under review.

Looking at the year-on-year for implied jet fuel demand we see that we are 247,000/bbls above last year’s level for this time of the year and we are above the five-year average by 322,000/bbls. Overall total implied demand decreased 581,000/bbls to 19.884/mmbls per day. Looking at the year-on-year for total implied demand we see that we are above last year’s level for this time of the year by 407,000/bbls and we are above the five-year average by 341,000/bbls. We viewed this weekly mixed EIA oil inventory report as mostly bearish. 

 

 

 

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