Afternoon Market Overview

This week’s inventory snapshot was overall bullish with an expected draw in crude oil (versus a large build in last night’s API data set) and surprise small build in distillate inventories and a larger than expected build in gasoline stocks.

The data was not in directional sync with most of the market expectations, and the actual values overshot the market projections.

Total combined US stocks decreased modestly this week and have been in a declining pattern since early last year. Total US crude oil production moved strongly higher as production returned from the freeze-off shut downs from the arctic blast earlier in January. Total US production is now well above the average annual high hit in 1970 and closing in on the average monthly record high hit in October of 1970 of 10.013 million bpd. Total commercial stocks of crude oil and refined products decreased by 2.9 million bbls after decreasing during the previous week.

The year over year deficit came in at 139.2 million barrels while the surplus versus the five- year average for the same week came in at 32.4 million barrels. Total combined stocks of crude and refined products have been decreasing for the last few months and are now 156.9 million bbls off their record high level. Total crude oil inventories decreased as total crude oil exports increased more than the increase in imports. Total crude stocks decreased by 1.1 million barrels. With the decrease in crude oil stocks this week the crude oil inventory status versus last year is showing a deficit of 76.7 million barrels while the surplus versus the five-year average for the same week came in around 19 million barrels. Distillate stocks increased by 0.6 million bbls versus the market expectations for a small draw as total US refinery run decreased to 90.9 percent of capacity. The year over year comparison shows current stock levels at about 29.3 million barrels below last year. The five-year average deficit came in around 1.3 million barrels.

Gasoline inventories increased by 3.1 million bbls and are still off the record high level hit earlier in the year. The deficit versus last year came in around 9.2 million barrels while the surplus versus the five-year average for the same week came in at 2.5 million barrels.