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 by 0.7 million barrels for the week ending December 13.

“This compares to our early look for the week which anticipated a 2.1 million barrel draw and a 1.4 million barrel draw realized for the week ending December 6,” the strategists said in the report.

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

In the report, the strategists noted that, “for this week’s crude balance, from refineries”, they “model crude runs up minimally following a pullback last week”.

“Among net imports, we model a moderate reduction, with exports (+0.7 million barrels per day) and imports (+0.3 million barrels per day) higher on a nominal basis,” they added.

The strategists warned in the report that the 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 an increase (+0.5 million barrels per day) following a soft print last week. Rounding out the picture, we anticipate a smaller increase in SPR inventory (+0.5 million barrels) on the week,” the strategists said in the report.

“Among products, we look for another large gasoline build (+4.9 million barrels), with distillate up slightly (+0.1 million barrels) and jet stocks effectively flat. We model implied demand for these three products at ~14.0 million barrels per day for the week ending December 13,” they continued.

In a separate report sent to Rigzone on Thursday by the Macquarie team, Macquarie strategists outlined that they “see potential for a modest U.S. crude stock draw” in the U.S. Energy Information Administration’s (EIA) weekly petroleum status report scheduled to be released tomorrow. That report will include data for the week ending December 13.

“Looking ahead to next week’s release, we see potential for a modest U.S. crude stock draw (-2.1 million barrels), with runs up slightly (+0.1 million barrels per day), nominal implied supply bouncing back (+0.5 million barrels per day), net imports lower (-0.5 million barrels per day), and a slightly smaller increase in SPR inventory (+0.6 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 builds in gasoline (+4.4 million barrels) and jet (+1.5 million barrels), with a modest draw in distillate (-0.5 million barrels),” they added.

In its latest weekly petroleum status report at the time of writing, which was released on December 11 and includes data for the week ending December 6, the EIA highlighted that U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, decreased by 1.4 million barrels from the week ending November 29 to the week ending December 6.

Crude oil stocks, not including the Strategic Petroleum Reserve, stood at 422.0 million barrels on December 6, 423.4 million barrels on November 29, and 440.8 million barrels on December 8, 2023, the report showed. Crude oil in the SPR stood at 392.5 million barrels on December 6, 391.8 million barrels on November 29, and 351.9 million barrels on December 8, 2023, according to the 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 1.628 billion barrels on December 6, the report revealed. This figure was down 0.2 million barrels week on week and up 17.7 million barrels year on year, the report outlined.

In the Macquarie report sent to Rigzone on Thursday, Macquarie strategists noted that the EIA “reported draws in commercial crude (-1.4 million barrels) and Cushing (-1.3 million barrels), with across the board builds in products (gasoline +5.1 million barrels, distillate +3.2 million barrels, jet +0.3 million barrels)”.

“Again this week, the crude balance realized tighter than we anticipated, while products were looser in aggregate,” the strategists stated in that report.

“Across a number of areas (implied crude supply, implied product demand, and yields), the report leaves us with more questions than answers,” they added.

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