US commercial crude stocks are expected to have increased by 2.3 million barrels for the reporting week ended March 8, analysts polled Monday by Platts said.
The American Petroleum Institute will release its weekly report at 4:30 p.m. EDT (2130 GMT) Tuesday, while the US Energy Information Administration will release its weekly data at 10:30 a.m. EDT (1530 GMT) Wednesday.
Analysts expect refinery runs to stay flat, and crude oil imports to provide mild support for a crude oil inventory gain.
"We're going to see refineries stay idle another week into maintenance and that keeps oil just backing up into the system," Oil Outlooks energy analyst Carl Larry said. "We may get a little relief from the imports into PADD 2 as pipeline issues may have been able to keep some oil up in Canada. As for any other imports, we think that we might see some into PADD 3 for Motiva, but the rest are minimal."
The expected increase in crude stocks is in line with the seasonal week on week changes shown by the EIA five-year average.
"In general, we're looking for the seasonal build/draw/draw pattern to hold this week," Schneider Electric energy analyst Jacob Correll said. Correll expects crude stocks rose 2.4 million barrels last week. "Last week?s downturn in refinery utilization was a little surprising, so we are projecting it to tick back higher, but not enough to send gasoline or distillate stocks higher this week," Correll added.
US gasoline stocks are expected to have fallen 1.5 million barrels last week, analysts said. Also in line with the EIA five-year average, last week's expected declines would be the fourth consecutive draw for US gasoline stocks.
Gasoline imports to the US Atlantic Coast are unlikely to materialize, due to the skyrocketing cost of Renewable Identification Numbers, or RINs. Due to these higher costs to import gasoline, stocks have accumulated in the Amsterdam-Rotterdam-Antwerp region, Carl Larry said.
"From last week's ARA numbers it looks like they're still sitting in tank in the EU," he said. "There?s a lot of talk about the costs increasing with the RINs factored in and that?s not going to help with the increasing demand."
At 61.3 million barrels for the reporting week ended March 1, USAC gasoline stocks were 1.35% below the EIA five-year average. This is down considerably from the 11.25% deficit to the five-year average in mid-January.
The EIA five-year average shows USAC gasoline stocks are about 3 weeks into a seasonal drawdown, which typically lasts through the summer.
Barriers to imports could leave the US Atlantic Coast -- home to the New York Harbor-delivered NYMEX RBOB contract -- short on supply and providing bullish support to futures.
US distillate stocks are expected to have fallen 2 million barrels last week, according to analysts polled.
"As refiners stay idle, so goes the supply of distillates," Larry said, expecting stocks to draw by 2 million barrels. "As [with] gasoline, the RINs issues are catching up to the refining margins and all we see is less supply on lack of margin profitability."
