Afternoon Market Overview

This week’s EIA report was slightly bearish based on total combined crude oil and refined product inventories increasing modestly after decreasing during the previous week. Total combined stocks are now 134.6 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 with a larger than expected builds in both distillate fuel stocks and in gasoline inventories. Total US crude oil production moved higher ending the year very near the high for 2017. Total US production is now well above the highest-level hit in the middle of July of 2015. There was an increase in production from Alaska with the lower forty-eight also increasing modestly.

Total US crude production increased by 25,000 bpd in the lower forty-eight while increasing by 3,000 bpd in Alaska. Total US crude oil production is now 172,000 bpd above the high hit in early June of 2015. Total US crude oil production is about 11.59 percent above where it was for the same week a year ago. This week’s production came in at 9.782 million bpd. Total crude oil inventories decreased as total crude oil exports decreased offset a bit by a small decrease in imports. Total crude stocks decreased by 7.4 million barrels. With the decrease in crude oil stocks this week the crude oil inventory status versus last year is showing a deficit of 58.6 million barrels while the surplus versus the five-year average for the same week came in around 36 million barrels. 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 1134.6 million bbls off their record high level. Distillate stocks surged by 8.9 million bbls versus the market expectations for a much smaller build as total US refinery run increased to 96.7 percent of capacity. The year over year comparison shows current stock levels at about 31.2 million barrels below last year.

The five-year average deficit came in around 2.3 million barrels. Gasoline inventories increased by 4.8 million bbls and are still off the record high level hit earlier in the year. The deficit versus last year came in around 7.3 million barrels while the deficit versus the five-year average for the same week came in at 0.7 million barrels.