Afternoon Market Overview

This week the EIA & API inventory data will be released on their regular schedule. The API report will be issued late this afternoon with the EIA inventory report scheduled for release on Wednesday at 10:30 AM.

This week’s US inventory data will be reflective of a normal operating environment and following the normal predictive models. Crude oil stocks likely decreased as refiner demand for crude oil increased while refined product inventories are projected to increase in this week’s report.

We are expecting a modest draw in US oil inventories, a modest build in distillate fuel stocks and a build in gasoline inventories. We are expecting total combined crude and refined product inventories to show a slight build in this week’s report. We are expecting crude oil stocks to decrease by about 3.3 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 35.4 million barrels while the overhang versus the five-year average for the same week will come in around 54.8 million barrels. With refinery runs expected to increase (by around 0.4 percent) we are expecting a build in gasoline stocks.

Gasoline stocks are expected to increase by 2 million barrels which would result in the gasoline year over year deficit coming in around 13.4 million barrels while the deficit versus the five-year average for the same week will come in around 3.9 million barrels. Distillate inventories are projected to increase by 1.6 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 27.3 million barrels below last year while the deficit versus the five-year average will come in around 11.7 million barrels.