Market Report & Analysis for 6/20/2018 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 is scheduled for release on Wednesday at 10:30 AM.

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

We are expecting total combined crude and refined product inventories to decrease in this week’s report. Expect crude oil stocks to decrease by about 2.7 million barrels. If the actual numbers are in sync with our projection the year over year deficit versus last year will widen to 79.4 million bbls while the comparison to the five-year average will now show a deficit of 2.7 million bbls. Canadian imports into the US for the week ending June 8 increased by 66,000 bpd to 3.711mn bpd and are now 14,000 bpd below the previous all-time record- high reached several weeks ago, per the U.S. Energy Information Agency.

With refinery runs expected to increase (around 0.2 percent) we are expecting a draw in gasoline stocks. Gasoline stocks are expected to decrease by 1 million barrels which would result in the gasoline year over year deficit coming in around 6.1 million bbls while the surplus versus the five-year average for the same week will narrow to 8.1 million bbls.

Distillate inventories are projected to increase by 1 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 36.8 million bbls while the deficit versus the five-year average will widen to 25.4 million bbls.