Macquarie Strategists Forecast USA Crude Inventory Build

Macquarie Strategists Forecast USA Crude Inventory Build
Macquarie strategists are forecasting that U.S. crude inventories will be up for the week ending October 25.
Image by mesh cube via iStock

In a report sent to Rigzone by the Macquarie team on Tuesday, Macquarie strategists revealed they are forecasting that U.S. crude inventories will be up 2.7 million barrels for the week ending October 25.

“This compares to our early look for the week which anticipated a similar 2.7 million barrel build, and a 5.5 million barrel build realized for the week ending October 18,” the strategists stated in the report, adding that “elsewhere, our product balances are slightly looser relative to our initial expectations”.

“For this week’s crude balance, from refineries, we model crude runs up slightly (+0.1 million barrels per day). Among net imports, we model a modest increase, with exports (-0.4 million barrels per day) and imports (-0.1 million barrels per day) lower on a nominal basis,” the strategists said in the report.

Timing of cargoes remains a source of potential volatility in this week’s crude balance, according to the strategists.

“From implied domestic supply (prod.+adj.+transfers), we look for a large reduction on a nominal basis (-0.5 million barrels per day) following last week’s very strong print. Rounding out the picture, we anticipate a larger increase in SPR inventory (+1.2 million barrels) on the week,” the strategists went on to state.

Among products, the strategists noted in the report that they “look for draws in distillate (-1.4 million barrels) and jet (-0.2 million barrels), with gasoline nearly flat (-0.1 million barrels)”.

“We model implied demand for these three products at ~14.8 million barrels per day for the week ending October 25,” they continued.

In a report sent to Rigzone by the Macquarie team last Wednesday, Macquarie strategists outlined that they “see potential for a moderate commercial U.S. crude stock build” in the next U.S. Energy Information Administration (EIA) weekly petroleum status report.

“Looking ahead to next week’s release, we see potential for a moderate commercial U.S. crude stock build (+2.7 million barrels), with runs up slightly (+0.1 million barrels per day), nominal implied supply lower (-0.5 million barrels per day), net imports higher (+0.3 million barrels per day), and a larger increase in Strategic Petroleum Reserve (SPR) inventory (+1.1 million barrels) on the week,” the Macquarie strategists said in that 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 gasoline inventories nearly flat (-0.1 million barrels), with draws in distillate (-2.0 million barrels) and jet (-0.4 million barrels),” they added.

The EIA’s next weekly petroleum status report is scheduled to be released today. It will show data for the week ending October 25.

The organization’s latest weekly petroleum status report at the time of writing was released on October 23 and included data for the week ending October 18.

This report showed that crude oil stocks, excluding the SPR, stood at 426.0 million barrels on October 18, 420.6 million barrels on October 11, and 421.1 million barrels on October 20, 2023. Crude oil in the SPR stood at 384.6 million barrels on October 18, 383.9 million barrels on October 11, and 351.3 million barrels on October 20, 2023, the report highlighted.

“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 5.5 million barrels from the previous week,” the EIA highlighted in the report.

“At 426.0 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 1.642 billion barrels on October 18, according to the EIA report, which outlined that this figure was up 6.7 million barrels week on week and up 25.6 million barrels year on year.

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


What do you think? We’d love to hear from you, join the conversation on the Rigzone Energy Network.

The Rigzone Energy Network is a new social experience created for you and all energy professionals to Speak Up about our industry, share knowledge, connect with peers and industry insiders and engage in a professional community that will empower your career in energy.


MORE FROM THIS AUTHOR
Andreas Exarheas
Editor | Rigzone