Afternoon Market Overview

We apologize for technical difficulties we have been experiencing that have affected the delivery timing of your service. We believe we have isolated the problem and are in the process of returning service reliability. This week’s inventory snapshot was overall bullish with a draw in crude oil and distillate fuel and a build in gasoline.

The data was not in directional sync with most of the market expectations. Total US stocks decreased modestly for the fourth weekly decrease in a row. 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 112.8 million bbls below the record high hit at the end of the first week of February of this year.

The EIA reported an expected draw in crude oil and expected build in gasoline with a surprise draw in distillate stocks. Total US crude oil production moved strongly 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 small increase in production from Alaska with the lower forty-eight increasing strongly. Total US crude production increased by 65,000 bpd in the lower forty-eight while increasing by 8,000 bpd in Alaska. Total US crude oil production is now 170,000 bpd above the high hit in early June of 2015. Total US crude oil production is about 12.5 percent above where it was for the same week a year ago. This week’s production came in at 9.780 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 93.6 million barrels while the surplus versus the five- year average for the same week came in at 81.4 million barrels.

Total combined stocks of crude and refined products have been decreasing for the last few months and are now 112.8 million bbls off their record high level. Total crude oil inventories decreased even as total crude oil exports decreased and while imports increased. Total crude stocks decreased by 5.1 million barrels.

With the decrease in crude oil stocks this week the crude oil inventory status versus last year is showing a deficit of 40.2 million barrels while the surplus versus the five-year average for the same week came in around 47.9 million barrels. Distillate stocks decreased 1.3 million bbls versus the market expectations for a build as total US refinery run decreased to 93.4 percent of capacity. The year over year comparison shows current stock levels at about 18.7 million barrels below last year. The five-year average surplus came in around 0.9 million barrels.

Gasoline inventories increased by 5.6 million bbls and are still off the record high level hit earlier in the year. The deficit versus last year came in around 3.5 million barrels while the surplus versus the five-year average for the same week came in at 4.2 million barrels.