Afternoon Market Overview

This week’s EIA inventory snapshot was overall bearish with a build in crude oil (versus a draw in Tuesday night’s API data set) a larger than expected build in distillate inventories and a larger than expected build in gasoline stocks.

The data was not in directional sync with most of the market expectations, and the actual values overshot the market projections. Total combined US stocks increased modestly this week for the second week in a row.

The EIA report was overall bearish based on total combined crude oil and refined product inventories increasing modestly after increasing during the previous week. Total combined stocks are still 150.4 million bbls below the record high hit at the end of the first week of February of 2017.

The EIA reported a build in crude oil, a large build in distillate fuel stocks and a build in gasoline inventories that was greater than the market expectations. Total US crude oil production surged strongly higher as production setting a record high last hit in 1970. Total US production is now well above the average annual high hit in 1970 above 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 4.4 million bbls after increasing during the previous week. The year over year deficit came in at 139.4 million barrels while the surplus versus the five- year average for the same week came in at 34.3 million barrels.

Total combined stocks of crude and refined products have been decreasing for the last few months and are now 150.4 million bbls off their record high level. Total crude oil inventories increased as total crude oil exports decreased less than the decrease in imports. Total crude stocks increased by 1.9 million barrels. With the increase in crude oil stocks this week the crude oil inventory status versus last year is showing a deficit of 88.3 million barrels while the surplus versus the five-year average for the same week came in around 15.1 million barrels. Distillate stocks increased by 3.9 million bbls versus the market expectations for a small draw as total US refinery run increased to 92.5 percent of capacity. The year over year comparison shows current stock levels at about 28.9 million barrels below last year. The five-year average surplus came in around 0.1 million barrels.

Gasoline inventories increased by 3.4 million bbls and are still off the record high level hit earlier in the year. The deficit versus last year came in around 10.7 million barrels while the surplus versus the five-year average for the same week came in at 1.2 million barrels.