Market Report & Analysis for 6/4/2018 Afternoon Edition

Afternoon Market Overview

This week’s EIA report was overall bearish based on total combined crude oil and refined product inventories decreasing for the week. Total combined stocks are now 165.9 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 builds in gasoline distillate fuel stocks. Total US crude oil production increased modestly after increasing during the previous week. Total US production remains 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. Total US crude production increased by 20,000 bpd in the lower forty-eight while increasing by 24,000 bpd in Alaska. Total US crude oil production is now 1.132 million bpd above the average annual record high in 1970 and 756,000 above the record monthly high in October of 1970. Total US crude oil production is about 16.3 percent above where it was for the same week a year ago.

This week’s production came in at 10.769 million bpd. Total US crude oil stocks decreased after increasing during the previous week as refinery run rates increased with crude oil imports decreasing strongly along with a strong increase in crude oil exports. Total commercial stocks of crude oil and refined products were higher by 1.7 million bbls after increasing during the previous week. The year over year deficit came in at 137 million barrels while the deficit versus the five-year average for the same week came in at 11 million barrels. Total combined stocks of crude and refined products have been decreasing for the last few months and are still 165.9 million bbls off their record high level.

Distillate stocks increased by 0.6 million bbls versus the market expectations for a draw as total US refinery runs increased to 93.9 percent of capacity with exports decreasing strongly on the week. The year over year comparison shows current stock levels at about 32.1 million barrels below last year. The five-year average deficit came in around 26.5 million barrels.

Gasoline inventories increased by 0.5 million bbls and are still off the record high level hit early in 2017. The deficit versus last year came in around 2.6 million barrels while the surplus versus the five-year average for the same week came in at 9 million barrels.