Afternoon Market Overview

The marketplace is perhaps reassessing yesterday’s inventory numbers as we make our way through Thursday afternoon. Wednesday’s EIA report was bullish based on total combined crude oil and refined product inventories decreasing modestly after decreasing during the previous week. Total combined stocks are now 110.3 million bbls below the record high hit at the end of the first week of February of this year.

The EIA reported a draw in crude oil and larger than expected build in gasoline with a smaller than expected build in distillate stocks. Total US crude oil production moved higher setting another new high. Total US production is now above the highest-level hit in the middle of July of 2015.

There was a small increase in production from Alaska with the lower forty- eight increasing modestly. Total US crude production increased by 20,000 bpd in the lower forty-eight while increasing by 5,000 bpd in Alaska. Total US crude oil production is now 97,000 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 9.707 million bpd.

Total commercial stocks of crude oil and refined products decreased by 2.5 million bbls after decreasing during the previous week. The year over year deficit came in at 93 million barrels while the surplus versus the five-year average for the same week came in at 81.9 million barrels. Total combined stocks of crude and refined products have been decreasing for the last few months and are now 110.3 million bbls off their record high level. Total crude oil inventories decreased as total crude oil exports decreased but while imports decreased more. Total crude stocks decreased by 5.6 million barrels. With the decrease in crude oil stocks this week the crude oil inventory status versus last year is showing a deficit of 37.7 million barrels while the surplus versus the five-year average for the same week came in around 52.5 million barrels.

Distillate stocks increased 1.6 million bbls and within the market expectations as total US refinery runs increased to 93.8 percent of capacity.

The year over year comparison shows current stock levels at about 27.3 million barrels below last year. The five-year average deficit came in around 11.7 million barrels. Gasoline inventories increased by 6.8 million bbls. The deficit versus last year came in around 8.6 million barrels while the surplus versus the five- year average for the same week came in at 0.9 million barrels.