Macquarie Strategists See 'Large US Crude Build' in Next EIA Report

In an oil and gas report sent to Rigzone on Friday by the Macquarie team, strategists at the company outlined that they “anticipate a large U.S. crude build” in the U.S. Energy Information Administration’s (EIA) next weekly petroleum status report.

That report is scheduled to be released on March 12 and will include data for the week ending March 7.

“Looking ahead to next week’s release, we anticipate a large U.S. crude build (+7.9 million barrels), with runs modestly higher (+0.2 million barrels per day) and net imports up sharply (+1.1 million barrels per day), nominal implied supply lower (-0.2 million barrels per day), and a larger increase in SPR [Strategic Petroleum Reserve] inventory (+0.6 million barrels) on the week,” the Macquarie strategists said in the report sent to Rigzone on Friday.

“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 (-1.4 million barrels), with builds in distillate (+0.4 million barrels) and jet (+0.5 million barrels),” they added.

In this report, the Macquarie strategists highlighted that, last week, the EIA “reported builds in commercial crude (+3.6 million barrels) and at Cushing (+1.1 million barrels), with solid product stats (gasoline -1.4 million barrels, distillate -1.3 million barrels, jet +0.6 million barrels)”.

“From a net petroleum perspective, the release was largely in line with our expectation, with a looser crude balance and tighter products in aggregate,” they added.

“Within the crude balance, runs realized well below our expectation this week (-0.5 million barrels per day), offsetting significant outperformance last week,” they went on to state.

“Net imports were moderately below our expectation (-0.4 million barrels per day), with nominal implied dom. supply (prod.+adj.+trans.) exceeding our expectation at 14.2 million barrels per day (we modeled ~13.9 million barrels per day),” the strategists continued.

The Macquarie strategists noted in the report that, “among products, implied demand was minimally below” their expectation last week, “with gasoline+distillate+jet at 14.4 million barrels per day (vs. ~14.5 million barrels per day est.), with the trailing four week average at 14.1 million barrels per day vs. 13.7 million barrels per day for the same four weeks last year”.

“Likewise, total disappearance (impl. demand + exports) for those three products was slightly below our expectation at 16.5 million barrels per day (vs. ~16.6 million barrels per day est.), with the trailing four week average at 16.1 million barrels per day vs. 15.8 million barrels per day for the same four weeks last year,” they added.

The EIA’s latest weekly petroleum status report at the time of writing was released on March 5 and included data for the week ending February 28.

In that report, the EIA highlighted that U.S. commercial crude oil inventories, excluding those in the SPR, increased by 3.6 million barrels from the week ending February 21 to the week ending February 28.

The report showed that crude oil stocks, not including the SPR, stood at 433.8 million barrels on February 28, 430.2 million barrels on February 21, and 448.5 million barrels on March 1, 2024. Crude oil in the SPR stood at 395.3 million barrels on February 28 and February 21, and 361.0 million barrels on March 1, 2024, the report revealed.

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 1.600 billion barrels on February 28, the report highlighted. Total petroleum stocks were down 4.6 million barrels week on week and up 16.8 million barrels year on year, the report showed.

In an oil and gas report sent to Rigzone on March 3 by the Macquarie team, Macquarie strategists revealed that they were forecasting that U.S. crude inventories would be up by 1.2 million barrels for the week ending February 28.

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