Afternoon Market Overview

Wednesday’s EIA inventory report was overall bearish based on total combined crude oil and refined product inventories increasing modestly after decreasing during the previous week. Total combined stocks are now 154.8 million bbls below the record high hit at the end of the first week of February of 2017.

The EIA reported build in crude oil, a draw in distillate fuel stocks and in gasoline inventories that was greater than the market expectations. Total US crude oil production moved higher as production on the week. 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 increased by 2.1 million bbls after decreasing during the previous week.

The year over year deficit came in at 142.4 million barrels while the surplus versus the five- year average for the same week came in at 33.6 million barrels. Total combined stocks of crude and refined products have been decreasing for the last few months and are now 154.4 million bbls off their record high level. Total crude oil inventories increased as total crude oil exports increased around the same level as the increase in imports. Total crude stocks increased by 6.8 million barrels. With the increase in crude oil stocks this week the crude oil inventory status versus last year is showing a deficit of 76.4 million barrels while the surplus versus the five-year average for the same week came in around 18.6 million barrels.

Distillate stocks decreased by 1.9 million bbls versus the market expectations for a small draw as total US refinery runs decreased to 88.1 percent of capacity. The year over year comparison shows current stock levels at about 32.9 million barrels below last year. The five-year average deficit came in around 3.2 million barrels.

Gasoline inventories decreased by 1.9 million bbls and are still off the record high level hit earlier in the year. The deficit versus last year came in around 15 million barrels and equal to the five-year average for the same week.