Macquarie Strategists See Potential for Crude Stock Draw in Next EIA Report

In a report sent to Rigzone on Thursday by the Macquarie team, Macquarie strategists outlined that they “see potential for a U.S. crude stock draw” in the U.S. Energy Information Administration’s (EIA) next weekly petroleum status report.

“Looking ahead to next week’s release, we see potential for a U.S. crude stock draw (-3.3 million barrels), with runs up (+0.4 million barrels per day), nominal implied supply sharply higher (+1.0 million barrels per day), net imports sharply lower (-1.2 million barrels per day), and a similar increase in SPR inventory (+1.4 million barrels) on the week,” the strategists said in the 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 (-2.8 million barrels), with distillate down slightly (-0.3 million barrels), and a build in jet (+0.6 million barrels),” they added.

The EIA’s next weekly petroleum status report will be published on November 27 and will include data for the week ending November 22.

In its latest weekly petroleum status report, which was released on November 20 and included data for the week ending November 15, the EIA showed that crude oil stocks, excluding the strategic petroleum reserve (SPR), stood at 430.3 million barrels on November 15, 429.7 million barrels on November 8, and 448.1 million barrels on November 17, 2023.

“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 0.5 million barrels from the previous week,” the EIA said in its latest weekly petroleum status report.

“At 430.3 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 1.633 billion barrels on November 15, according to the EIA report, which outlined that this figure was up 4.4 million barrels week on week and up 13.6 million barrels year on year.

In the Macquarie report sent to Rigzone yesterday, Macquarie strategists highlighted that, this week, the EIA “reported builds in commercial crude (+0.5 million barrels), gasoline (+2.1 million barrels), and jet (+0.7 million barrels), with small draws in distillate (-0.1 million barrels) and Cushing (-0.1 million barrels)”.

“All told, aggregate crude and product balances realized loose relative to our expectations. Notably, we continue to see signs of strong underlying U.S. oil supply, despite Gulf of Mexico shut-ins and nominally weak implied supply in this week’s stats,” they added.

The strategists stated in the report that, “within the crude balance, runs were slightly below our expectation (-0.1 million barrels per day), with net imports much higher than expected on a nominal basis (+0.9 million barrels per day)”.

“Implied dom. supply (prod.+adj.+trans.) was 13.2 million barrels per day nominally (we modeled ~14.0 million barrels per day), with the trailing four week average at 13.7 million barrels per day nominally,” they added.

“When adjusted for third-party est. waterborne flows, these figures appear much stronger. Again, while disruptions have popped up in recent months, after accounting for these factors, underlying implied supply appears stronger than we believe is broadly appreciated,” they continued.

The Macquarie strategists noted in the report that, within products, “implied demand was below our expectation this week, with gasoline+distillate+jet at 13.8 million barrels per day (vs. ~14.5 million barrel per day est.), with the trailing four week average at 14.4 million barrels per day vs. 14.7 million barrels per day for the same four weeks last year”.

“Total disappearance (impl. demand + exports) for those three products was also well below our expectation at 16.0 million barrels per day (vs. ~16.9 million barrel per day est.), with the trailing four week average at 16.8 million barrels per day vs. 16.8 million barrels per day for the same four weeks last year,” they added.

In a separate report sent to Rigzone late Monday by the Macquarie team, Macquarie strategists projected that U.S. crude inventories would 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 that report.

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