Afternoon Market Overview

This week’s EIA report was overall bullish based on total combined crude oil and refined product inventories declining for the week. Total combined stocks are now 168.8 million bbls below the record high hit at the end of the first week of February of 2017. The EIA reported a draw in crude oil with draws in both distillate fuel stocks and in gasoline inventories that was slightly larger than the market expectations. Total US crude oil production increased after increasing during the previous week.

Total US production is well above the average annual high hit in 1970 and above the average monthly record high hit in October of 1970 of 10.013 million bpd. There was an increase in production from Alaska with the lower forty-eight increasing. Total US crude production increased by 20,000 bpd in the lower forty-eight while increasing by 6,000 bpd in Alaska. Total US crude oil production is now 770,000 bpd above the average annual record high in 1970 and 394,000 above the record monthly high in October of 1970. Total US crude oil production is about 14.58 percent above where it was for the same week a year ago. This week’s production came in at 10.407 million bpd. Total US crude oil stocks decreased after increasing during the previous three weeks as refinery run rates increased with crude oil imports declining.

Total commercial stocks of crude oil and refined products were lower by 7 million bbls after declining during the previous week. The year over year deficit came in at 149.2 million barrels while the surplus versus the five- year average for the same week came in at 13.2 million barrels. Total combined stocks of crude and refined products have been decreasing for the last few months and are now 168.8 million bbls off their record high level.

Total crude oil inventories decreased as total crude oil exports increased slightly while imports decreased significantly. Total crude stocks decreased by 2.6 million barrels. With the decrease in crude oil stocks this week the crude oil inventory status versus last year is showing a deficit of 104.8 million barrels while the deficit versus the five-year average for the same week came in around 6.3 million barrels. Distillate stocks decreased by 2.1 million bbls versus the market expectations for a smaller draw even as total US refinery runs increased to 91.7 percent of capacity, but exports decreased strongly on the week.

The year over year comparison shows current stock levels at about 24.4 million barrels below last year. The five-year average deficit came in around 10.1 million barrels.

Gasoline inventories decreased by 1.7 million bbls and are still off the record high level hit early in 2017. The deficit versus last year came in around 0.4 million barrels while the surplus versus the five-year average for the same week came in at 10.7 million barrels.