Afternoon Market Overview

This week the EIA & API inventory data will on its regular schedule even with the US Government Shutdown according to the EIA website. The API report will be issued late Tuesday afternoon with the EIA inventory report scheduled for release on Wednesday at 10:30 AM.

Crude oil stocks likely decreased even as refiner demand for crude oil decreased while refined product inventories are projected to be mixed in this week’s report. We are expecting another strong draw in US crude oil inventories, a modest draw in distillate fuel stocks due to the cold last week and a build in gasoline inventories. We are expecting total combined crude and refined product inventories to show a draw in this week’s report. Expect crude oil stocks to decrease by about 3.6 million barrels. If the actual numbers are in sync with our projection the year over year comparison for crude oil will now show a deficit of 79.2 million barrels while the overhang versus the five-year average for the same week will come in around 16.5 million barrels.

With refinery runs expected to decrease (by around 0.9 percent) we are still expecting a build in gasoline stocks. Gasoline stocks are expected to increase by 2.8 million barrels which would result in the gasoline year over year deficit coming in around 9.5 million barrels while the surplus versus the five-year average for the same week will come in around 2.2 million barrels. Distillate inventories are projected to decrease by 1.3 million barrels on the week.

If the actual EIA data is in sync with our distillate fuel projection inventories versus last year will likely now be about 31.2 million barrels below last year while the deficit versus the five-year average will come in around 3.2 million barrels.