US commercial crude stocks likely fell around 1.5 million barrels for the reporting week ended May 24, according to a Platts analysis and a survey of oil analysts Tuesday.
The American Petroleum Institute will release its weekly report at 4:30 p.m. EDT (2030 GMT) Wednesday, while the US Energy Information Administration is scheduled to release its weekly data at 11:00 a.m. EDT (1500 GMT) Thursday. Both sets of data are delayed by one day due to the Memorial Day holiday Monday.
EIA data shows US crude stocks typically draw at this point in the year, and at 394.552 million barrels for the reporting week ended May 17, stocks are amply supplied, sitting at a surplus of over 9% to the EIA five-year average.
The five-year average shows a 2.2 million-barrel decline is typical for the latest reporting week, and last week saw two US refineries bring sizable unit capacity back into production, which would make a case for a larger draw in crude stocks.
US refinery utilization rates are expected to increase 0.6 percentage point. An FCC, a hydrodesulfurization and a benzene unit at Tesoro's 170,000 b/d Martinez, California, refinery came back online May 18, according to a company filing. A 32,500 b/d FCC at Western Refining's 122,000 b/d El Paso, Texas, refinery also came back online last week.
However, the wild card lately has been the volatility in crude oil imports. EIA data shows US imports averaged 8.1 million b/d for the reporting week ended May 17, up from around 7.6 million b/d for the two reporting weeks prior. Over the past seven months, US crude imports have vacillated between 7-8 million b/d, although they have trended lower over that time period.
Imports are about 1 million b/d below the EIA five-year average.
"Imports will continue to suffer this week and more than likely into the rest of the summer," Oil Outlooks President Carl Larry said.
US gasoline stocks are expected to have fallen 800,000 barrels last week, in line with a decline shown by the week-on-week change in the EIA five-year average.
However, stocks have increased over the previous two reporting periods. At 220.68 million barrels, US gasoline stocks are a comfortable 5.5% above the five-year average of EIA data.
"I can't believe that we will [see another build]," said Larry, who expects gasoline imports to back off slightly.
Gasoline imports averaged a three-week high of 1.041 million b/d for most recent reporting period, and the five-year average of EIA data suggests imports should have remained stable at around 1 million b/d last week and into the next reporting week.
However implied demand for gasoline, which averaged 8.79 million b/d for the most recent reporting period, likely rose last week due to Memorial Day holiday, which typically ushers in a period of high demand throughout the US summer.
US distillate stocks are expected to have fallen 600,000 barrels, in line with the week-on-week change in the EIA five-year average.
At 118.812 million barrels, US distillate stocks are more than 11% below the five-year average. The five-year average also shows that US distillate stocks often begin to build around this point ahead of the US summer.
