Weekly Oil Data Should Show a 1 Million-Barrel Draw in US Commercial Crude Inventories

Weekly oil data from the US Energy Information Administration and the American Petroleum Institute should show a 1 million-barrel draw in US commercial crude inventories for the week ending December 28, analysts polled by Platts said Wednesday. 

API is scheduled to release its weekly data at 4:30 p.m. EST (2130 GMT) Thursday. EIA's weekly oil statistics will be released at 11 a.m. EST (1530 GMT) Friday. Both reports were delayed due to the New Years holiday. 

A draw in crude stocks would agree with historical data for the week. According to the EIA's data, the five-week average shows a stock draw of 800,000 barrels. 

A crude stock draw will still leave the US market well-supplied. US stocks at 371 million barrels the week ending December 21 were 15.6% above the five-year average, according to the EIA's data. 

While analysts expected US production to remain high, they also anticipated a slight increase in refinery runs and low crude imports. 

"We'll pop domestic production over 7 million b/d and we'll also go out with the lowest yearly average for crude imports since 2002," said Oil Outlooks President Carl Larry. 

For the week ending December 21, the EIA showed US production at 6.984 million b/d, the highest since December 1993. 

US crude imports at 8.025 million b/d the week ending December 21 were 926,000 b/d below the five-year average. 

"Weak demand and elevated oil production could follow-through this week and will be additive to inventories," said EOXLive analyst Tom Pawlicki. "Imports may reduce oil stocks, on the other hand, as they typically fall through the end of the year as refiners tend to liquidate oil stocks." 

While refiners tend to reduce inventories, Pawlicki added, "they tend to do it more through lowering imports than increasing refinery utilization. The rate of utilization usually trends in a flat direction in the last three weeks of the year before a sharp fall is witnessed in the first week of the new year." 

Analysts on average were anticipating refinery operations to increase 0.45 percentage points to 90.75% of capacity. 

Analysts were looking for gasoline stocks to build by 2.3 million barrels and distillate stocks to build by 1.6 million barrels. 

US gasoline stocks tend to build this time of year, with the five-year average of the EIA's data showing an increase of 2.5 million barrels. 

US gasoline stocks have been rising since mid-October, but were coming off a tight supply situation. The US Atlantic Coast, meanwhile, remains snug on supply, which could prove supportive for the New York-delivered NYMEX RBOB contract. 

USAC stocks at 51.1 million barrels the week ending December 21 were 9.3% below the five-year average, according to the EIA's data. In contrast, West Coast stocks at 33 million barrels were 13.5% above the average, while Gulf Coast stocks at 81.3 million barrels were 14% above the average. 

Total US distillate stocks tend to build this time of year, although heating oil stocks typically decline as demand picks up during the colder months.