Macquarie Strategists Forecast USA Crude Inventory Drop

In a report sent to Rigzone by the Macquarie team late Monday, Macquarie strategists revealed that they are forecasting that U.S. crude inventories will be down one million barrels for the week ending November 29.

“This compares to our early look for the week which anticipated a 0.5 million barrel build, and a 1.8 million barrel draw realized for the week ending November 22,” the strategists said in the report.

“All told, the crude balance appears modestly tighter than our initial expectations, while on an aggregate basis, our product balances are modestly looser,” they added.

In the report, the strategists noted that, “for this week’s crude balance, from refineries”, they model crude runs “up solidly (+0.5 million barrels per day) following a weak print last week”.

“Among net imports, we model a very large increase, with exports lower (-0.5 million barrels per day) and imports higher (+0.7 million barrels per day) on a nominal basis,” they added, noting that timing of cargoes remains a source of potential volatility in this week’s crude balance.

“From implied domestic supply (prod.+adj.+transfers), we look for a decrease (-0.5 million barrels per day) following a very strong nominal print last week. Rounding out the picture, we anticipate a larger increase in SPR inventory (+1.4 million barrels) on the week,” they went on to state.

Focusing on products, the strategists noted in the report that they “look for across the board builds led by distillate (+2.7 million barrels), with gasoline (+0.6 million barrels) and jet stocks (+0.3 million barrels) also higher”.

“We model implied demand for these three products at ~13.9 million barrels per day amidst seasonal/holiday effects for the week ending November 29,” they added.

In a separate report sent to Rigzone on Friday by the Macquarie team, Macquarie strategists outlined that they saw “potential for a small U.S. crude stock build” in the U.S. Energy Information Administration’s (EIA) next weekly petroleum status report, which is scheduled to be released on December 4 and will include data for the week ending November 29.

“Looking ahead to next week’s release, we see potential for a small U.S. crude stock build (+0.5 million barrels), with runs up meaningfully (+0.5 million barrels per day), nominal implied supply lower (-0.5 million barrels per day), net imports sharply higher (+1.4 million barrels per day), and a larger increase in SPR inventory (+1.6 million barrels) on the week,” the strategists said in that report.

“We note potential for volatility in these figures given the incomplete nature of this week’s data. Among products, our preliminary expectations point to a draw in gasoline (-0.6 million barrels), with a distillate build (+3.1 million barrels), and jet stocks up slightly (+0.1 million barrels),” they added.

In that report, the strategists highlighted that, in its latest weekly petroleum status report, which was released on November 27 and included data for the week ending November 22, the EIA “reported draws in commercial crude (-1.8 million barrels), Cushing (-0.9 million barrels), and jet (-0.4 million barrels), with builds in gasoline (+3.3 million barrels) and distillate (+0.4 million barrels)”.

“All told, aggregate crude and product balances again realized loose relative to our expectations,” they added in that report.

Crude oil stocks, excluding the SPR, stood at 428.4 million barrels on November 22, 430.3 million barrels on November 15, and 449.7 million barrels on November 24, 2023, the EIA showed in its November 27 report, which highlighted that data may not add up to totals due to independent rounding.

“At 428.4 million barrels, U.S. crude oil inventories are about five percent below the five year average for this time of year,” the EIA said in its latest weekly petroleum status report.

Total petroleum stocks – including crude oil, total motor gasoline, fuel ethanol, kerosene type jet fuel, distillate fuel oil, residual fuel oil, propane/propylene, and other oils – stood at 1.632 billion barrels on November 22, the report revealed. This figure was down 0.6 million barrels week on week and up 9.8 million barrels year on year, the report showed.

To contact the author, email andreas.exarheas@rigzone.com