New York — US commercial crude stocks rose a surprising 5.84 million barrels to 411.08 million barrels for the reporting week ended July 13, counter to analysts expectations, an S&P Global Platts analysis showed Wednesday.
Analysts surveyed Monday by Platts had expected weekly crude draws to continue, this week by around 3 million barrels. Prior to this week’s build, stocks had fallen six out of the past seven weeks. Since the beginning of June, US crude stocks have tumbled 31 million barrels, nearly half of which took place the week ended July 6.
Despite the stock build, NYMEX August WTI and ICE September Brent were near flat at $68.20/b and $72.51/b, respectively, during during midday US trading.
The build brings current stocks to around 1.8% below the five-year of EIA data, in from over 4% below the week prior. This means that not only are crude stocks rising, but they are also lining up more closely to historical norms.
While crude runs at US refineries did fall 413,000 b/d to 17.24 million b/d — counter to surveyed expectations but in line with S&P Global Platts Analytics estimates — a sharp rebound in crude imports also helped boost stocks.
Imports bounced back strongly, up 1.64 million b/d to 9.07 million b/d. The prior week’s 7.43 million b/d appears to be an outlier, as imports were over 9 million b/d for the week ended June 29.
And while imports of Canadian crude remain strong above 3.4 million b/d, imports of Saudi crude have held above 1 million b/d for two weeks running, compared to sub 800,000 b/d levels over the prior three reporting weeks.
A tighter ICE Brent/WTI spread may have helped US crude exports come off strength last week. Exports dropped 566,000 b/d to 1.46 million b/d — in line with Platts cFlow trade-flow data.
While the Brent/WTI spread has come in below $5/b in recent weeks — making exports more difficult to hedge — Platts calculations show US crudes like WTI and Mars are still more than competitive in global markets.
For example, WTI delivered into China has moved to a 55 cent/b discount to Dated Brent thus far in July, compared to North Sea Forties and ADNOC’s Murban, both of which are on either side of Dated Brent plus $2/b.
Mars, meanwhile, has moved to a $2.40/b discount to Russian Urals on a delivered basis into Rotterdam, and a $1.88/b discount to Saudi Arab Medium. This is of particular importance as European refiners Wednesday said they are already starting to cease imports of Iranian crude for September-loading cargoes as the first round of US sanctions on Iran kick off next month (See story, 1304 GMT).
Nevertheless, this is the lowest US crude exports have been since early-April, having reached a record high of 3 million b/d for the week ended June 22, EIA data shows.
US GASOLINE STOCKS DROP SHARPLY
US gasoline stocks fell beyond analysts expectations last week, down 3.17 million barrels to 235.83 million barrels. Despite the drop, stocks are still 4.6% above the EIA five-year average.
Analysts surveyed Monday had been looking for a 1 million-barrel decline.
Prompt NYMEX August RBOB turned positive in the wake of the data, and was around 1.28 cents higher at $2.0387/gal in midday US trade.
US distillate stocks rose 370,000 barrels to 109.16 million barrels, compared to expectations of a scant 45,000-barrel draw. Still, US distillate stocks remain exceedingly tight, sitting almost 20% below the five-year average.
Prompt ULSD was up 1.34 cents at $2.0858/gal.
–James Bambino, [email protected]
–Edited by Derek Sands, [email protected]
Source: S&P Global Platts
