Macquarie Strategists Forecast USA Crude Inventory Drop

In an oil and gas market note sent to Rigzone late Monday by the Macquarie team, Macquarie strategists revealed that they are forecasting that U.S. crude inventories will be down 1.2 million barrels for the week ending November 15.

“This compares to our early look for the week which anticipated a 4.3 million barrel build, and a 2.1 million barrel build realized for the week ending November 8,” the strategists said in the note.

“While our crude balance appears significantly tighter than our initial expectations, on an aggregate basis, our product balances appear little changed,” they added.

“For this week’s crude balance, from refineries, we model crude runs down modestly (-0.2 million barrels per day). Among net imports, we model a healthy decrease, with exports (+1.3 million barrels per day) and imports (+0.6 million barrels per day) higher on a nominal basis,” they continued.

The strategists warned in the report 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 small increase on a nominal basis (+0.2 million barrels per day) amidst Gulf of Mexico disruptions,” the strategists said in the report.

“Rounding out the picture, we anticipate a larger increase in Strategic Petroleum Reserve (SPR) inventory (+1.4 million barrels) on the week,” they added.

The strategists went on to state in the note that, among products, they “look for draws in gasoline (-2.4 million barrels) and distillate (-0.3 million barrels), with a build in jet (+0.7 million barrels)”.

“We model implied demand for these three products at ~14.5 million barrels per day for the week ending November 15,” they said.

In a separate oil and gas market note sent to Rigzone by the Macquarie team last Friday, Macquarie strategists outlined that they saw “potential for a healthy U.S. crude stock build” in the U.S. Energy Information Administration’s (EIA) upcoming weekly petroleum status report.

“Looking ahead to next week’s release, we see potential for a healthy U.S. crude stock build (+4.3 million barrels), with runs down slightly (-0.1 million barrels per day), nominal implied supply higher (+0.2 million barrels per day), net imports modestly higher (+0.2 million barrels per day), and a larger increase in SPR inventory (+1.4 million barrels) on the week,” the Macquarie strategists said in that market note.

“We note potential for volatility in these figures given the incomplete nature of this week’s data, GOM storm impacts, and our expectation for a step-up in imports and exports,” they added.

“Among products, our preliminary expectations point to a draw in gasoline (-3.3 million barrels), with distillate nearly flat (+0.1 million barrels), and a build in jet (+1.2 million barrels).

The EIA’s next weekly petroleum status report will be released on November 20 and will include data for the week ending November 15.

In its latest weekly petroleum status report, which was released on November 14 and includes data for the week ending November 8, the EIA revealed that crude oil stocks, excluding the SPR, stood at 429.7 million barrels on November 8, 427.7 million barrels on November 1, and 439.4 million barrels on November 10, 2023.

“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 2.1 million barrels from the previous week,” the EIA noted in its report.

“At 429.7 million barrels, U.S. crude oil inventories are about four percent below the five year average for this time of year,” it added.

Total petroleum stocks stood at 1.628 billion barrels on November 8, according to the EIA report, which outlined that this figure was down 5.9 million barrels week on week and up 13.6 million barrels year on year.

The EIA’s weekly petroleum status report highlighted that data may not add up to totals due to independent rounding.

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