Oil Strategists See Potential for USA Crude Build in Next EIA Report

In an oil and gas report sent to Rigzone late Thursday by the Macquarie team, strategists at the company revealed that they “see potential for a commercial U.S. crude stock build” in next week’s U.S. Energy Information Administration (EIA) weekly petroleum status report.

“Looking ahead to next week’s release, we see potential for a commercial U.S. crude stock build (+4.0 million barrels), with runs down modestly (-0.2 million barrels per day), nominal implied supply modestly lower (-0.2 million barrels per day), a large increase in net imports (+1.3 million barrels per day nominally), and a smaller increase in SPR [Strategic Petroleum Reserve] inventory (+0.7 million barrels) on the week,” the strategists said in the report.

“Within these balances, we anticipate a soft export figure of ~3.5 million barrels per day on the week, although this is not particularly surprising given typical intra-month export patterns,” they added.

“Given the incomplete nature of this week’s data, we note potential for volatility in these figures. Among products, our preliminary expectations point to a draw in gasoline (-1.4 million barrels) with builds in distillate (+1.8 million barrels) and jet (+1.3 million barrels),” they continued.

The Macquarie strategists pointed out in the report that, this week, the EIA “reported draws in commercial crude (-6.9 million barrels), Cushing (-1.1 million barrels), distillate (-0.4 million barrels), and jet (-0.8 million barrels), with a build in gasoline (+0.8 million barrels)”.

“In synthesis, these stats were bullish relative to our expectations across crude and products,” they added.

The strategists noted in the report that, “within the crude balance, runs were above our expectation (+0.1 million barrels per day), with net imports much lower than expected on a nominal basis (-0.6 million barrels per day)”.

“Implied dom. supply (prod.+adj.+trans.) was 14.1 million barrels per day nominally (we modeled ~14.0 million barrels per day), with the trailing four week average at 14.0 million barrels per day nominally,” they continued.

The Macquarie strategists also said in the report that, within products, implied demand again came in above their expectation this week, “with gasoline+distillate+jet at 14.7 million barrels per day (vs. ~14.3 million barrels per day est.), with the trailing four week average at 14.6 million barrels per day vs. 14.5 million barrels per day for the same four weeks last year”.

“Total disappearance (impl. demand + exports) for those three products was also well ahead of our expectation at 17.3 million barrels per day, with the trailing four week average at 17.2 million barrels per day vs. 16.7 million barrels per day for the same four weeks last year,” they added.

“Meanwhile, crude runs are up minimally year on year over the same period,” they went on to state.

In its latest weekly petroleum status report, which was released on September 5 and included data for the week ending August 30, the EIA showed that crude oil stocks, not including the SPR, stood at 418.3 million barrels on August 30, 425.2 million barrels on August 23, and 416.6 million barrels on September 1, 2023.

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 1.649 billion barrels on August 30, the report showed. This figure was down 6.2 million barrels week on week and up 44.4 million barrels year on year, the report outlined.

In an oil and gas report sent to Rigzone on September 4, Macquarie strategists revealed that they were forecasting that U.S. crude inventories would be down 3.1 million barrels for the week ending August 30.

“This compares to our early look for the week which anticipated flattish crude stocks,” the strategists noted in the report.

In an oil and gas report sent to Rigzone on August 28, Macquarie strategists outlined that they “see potential for commercial U.S. crude stocks effectively flat (+0.1 million barrels)” in the EIA’s September 5 weekly petroleum status report.

The EIA’s next weekly petroleum status report is scheduled to be released on September 11 and will include data for the week ending September 6. 

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