Afternoon Market Overview

Wednesday’s EIA report was bullish based on total combined crude oil and refined product inventories decreasing strongly after decreasing during the previous week. Total combined stocks are now 127 million bbls below the record high hit at the end of the first week of February of this year.

The EIA reported a larger than expected draw in crude oil and expected build in gasoline with a surprise build in distillate stocks. Total US crude oil production moved slightly higher setting another new high. Total US production is now well above the highest-level hit in the middle of July of 2015. There was a decrease in production from Alaska with the lower forty-eight increasing modestly. Total US crude production increased by 15,000 bpd in the lower forty-eight while decreasing by 6,000 bpd in Alaska. Total US crude oil production is now 179,000 bpd above the high hit in early June of 2015.

Total US crude oil production is about 11.3 percent above where it was for the same week a year ago. This week’s production came in at 9.789 million bpd. Total US crude oil stocks decreased after decreasing during the previous week. Total commercial stocks of crude oil and refined products decreased by 14.2 million bbls after decreasing during the previous week. The year over year deficit came in at 95.8 million barrels while the surplus versus the five- year average for the same week came in at 71.3 million barrels. Total combined stocks of crude and refined products have been decreasing for the last few months and are now 127 million bbls off their record high level.

Distillate stocks increased 0.7 million bbls versus the market expectations for a draw as total US refinery run increased to 94.1 percent of capacity. The year over year comparison shows current stock levels at about 24.7 million barrels below last year. The five-year average deficit came in around 12.3 million barrels.

Gasoline inventories increased by 1.3 million bbls and are still off the record high level hit earlier in the year. The deficit versus last year came in around 0.9 million barrels while the surplus versus the five-year average for the same week came in at 4.1 million barrels.