Macquarie Strategists See Potential for 'Solid US Crude Stock Draw'

In an oil and gas report sent to Rigzone by the Macquarie team late last week, Macquarie strategists outlined that they “see potential for a solid U.S. crude stock draw” in this week’s U.S. Energy Information Administration (EIA) weekly petroleum status report.

The EIA’s next weekly petroleum status report is scheduled to be released on December 27 and will show data for the week ending December 20. The EIA’s most recent weekly petroleum status report was released on December 18 and included data for the week ending December 13.

“Looking ahead to next week’s release, we see potential for a solid U.S. crude stock draw (-4.6 million barrels), with runs dipping slightly (-0.1 million barrels per day), nominal implied supply falling back (-0.7 million barrels per day), net imports slightly higher (+0.1 million barrels per day), and a larger increase in SPR inventory (+0.7 million barrels) on the week,” the Macquarie strategists said in the report sent to Rigzone late Thursday.

“We note potential for volatility in these figures given the incomplete nature of this week’s data. Among products, our preliminary expectations point to another build in gasoline (+2.9 million barrels), with distillate (+0.2 million barrels) and jet (-0.1 million barrels) stocks relatively flat,” they added.

In that report, the Macquarie strategists highlighted that, that week, the EIA “reported draws in commercial crude (-0.9 million barrels), distillate (-3.2 million barrels), and jet (-0.6 million barrels) with builds in gasoline (+2.3 million barrels) and at Cushing (+0.1 million barrels)”.

“All told, the crude balance was roughly in-line with our expectations, while products were considerably tighter,” the strategists added.

“Within the crude balance, runs were modestly below our expectation (-0.1 million barrels per day), with net imports much lower than expected on a nominal basis (-0.8 MBD),” they continued.

“Implied dom. supply (prod.+adj.+trans.) was a robust 14.8 million barrels per day (we modeled ~14.1 million barrels per day), with the trailing four week average jumping to 14.1 million barrels per day nominally,” they went on to state.

The strategists noted in the report that these implied supply figures appear softer when adjusted for third party estimated waterborne flows.

“Among products, implied demand was sharply above our expectation this week, with gasoline+distillate+jet at 15.1 million barrels per day (vs. ~14.0 million barrels per day est.), with the trailing four week average at 14.3 million barrels per day vs. 13.7 million barrels per day for the same four weeks last year,” the Macquarie strategists said in the report.

“Total disappearance (impl. demand + exports) for those three products was also well above our expectation at 17.6 million barrels per day (vs. ~16.8 million barrels per day est.), with the trailing four week average at 17.0 million barrels per day vs. 16.3 million barrels per day for the same four weeks last year,” they added.

“Broadly speaking, refined product yields were in-line with our expectations,” the analysts highlighted in the report.

The EIA’s December 18 weekly petroleum status report showed that crude oil stocks, not including the SPR, stood at 421.0 million barrels on December 13, 422.0 million barrels on December 6, and 443.7 million barrels on December 15, 2023. The EIA report highlighted that data may not add up to totals due to independent rounding.

Crude oil in the SPR stood at 393.1 million barrels on December 13, 392.5 million barrels on December 6, and 352.5 million barrels on December 15, 2023, 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 1.626 billion barrels on December 13, the report highlighted. This figure was down 2.7 million barrels week on week and up 12.2 million barrels year on year, the report outlined.

In a report sent to Rigzone last Monday by the Macquarie team, Macquarie strategists revealed that they were forecasting that U.S. crude inventories would 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 that 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.

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