Market Report & Analysis for 5/2/2018 Afternoon Edition

Afternoon Market Overview

This week the EIA & API inventory data will be released on their regular schedule. The API report will be issued late this afternoon with the EIA inventory report scheduled for release on Wednesday at 10:30 AM.

Crude oil stocks likely increased even as refiner demand for crude oil increased while refined product inventories are projected to decline in this week’s report. We are expecting a build in US crude oil inventories, a draw in distillate fuel stocks and in gasoline inventories as refinery runs likely increased. We are expecting total combined crude and refined product inventories to decline in this week’s report.

Expect crude oil stocks to increase by about 1.3 million barrels. If the actual numbers are in sync with my projection the year over year deficit versus last year will narrow to 96.8 million bbls while the comparison to the five-year average will now show a deficit of 14.8 million bbls. Canadian imports into the US for the week ending April 20 increased by 304,000 bpd to 3.238mn bpd and are now 397,000 bpd below the previous all- time record-high reached early in 2017, per the U.S. Energy Information Agency. With refinery runs expected to increase (around 0.4 percent) we are expecting a draw in gasoline stocks.

Gasoline stocks are expected to decrease by 1.6 million barrels which would result in the gasoline year over year surplus coming in around 6 million bbls while the surplus versus the five-year average for the same week will narrow to 7.7 million bbls. Distillate inventories are projected to decrease by 1.8 million barrels on the week.

If the actual EIA data is in sync with our distillate fuel projection inventories versus last year will likely still be well below last year by 29.5 million bbls while the deficit versus the five-year average will widen to 20.2 million bbls.