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POST DOE WRAP: Oil and products drop despite crude draw

HOUSTON, July 11, 2018 (PCW) -- NYMEX crude and products fell hard early Wednesday, defying government figures that showed a steep fall in oil inventories.

As of 10:01 am CDT, August NYMEX WTI was down $0.98/bbl to $73.13/bbl; Aug gasoline fell 2.97 cpg to 213.06 cpg, and July diesel dropped 4.04 cpg to 218.14 cpg.

Crude inventories fell 12.6 million barrels, the steepest weekly drop since September 2, 2016. The total stocks were the lowest since February 20, 2015.

The crude drop may be partially explained by a decline in imports from Canada, where a Suncor upgrader has been down since June 20, and will remain so through mid-July; the supply loss is about 300,000 b/d, one source said.

Despite crude tightness, gasoline looks well supplied as the summer winds down; diesel supplies built.

Crude inventories fall 12.6 million barrels

The US Energy Information Administration statistics for the week ending July 6 showed 12.6 million barrel decrease in commercial crude inventories to 405.2 million barrels (“4% below the five-year average” per the EIA).

Domestic crude oil production was put at 10.9 million b/d, essentially flat for the week, and up 1.503 million versus the same period last year.

Imports of crude were off 1.624 million b/d to 7.4 million on the week. Over the past four weeks, crude imports averaged 8.3 million b/d, up 5.9% compared to last year at this time.

Total gasoline imports were put at 853,000 b/d, up from 648,000 last week; for the same period last year the figure was 528,000. Distillate imports were 104,000 b/d, up from 92,000 on the week; the figure for last year was 125,000 b/d (typically the US imports the greatest volume of products to the US East Coast and exports from the US Gulf Coast).

Total product demand falls 1.4%

Total product demand over the past four weeks was put at 20.4 million b/d, down 1.4% versus the same period last year.

Total gasoline inventories (including blendstocks) were off 700,000 barrels to 239 million (“6% above the five-year average”), and 3.3 million above last year. Gasoline demand was 9.6 million b/d over the past four weeks, down 1.7.% from the same period last year.

Distillate stocks totaled 121.7 million barrels (“12% below the five-year average”), up 4.1 million on the week, and 31.9 million below last year. Distillate demand over the past four weeks was 3.8 million b/d, off 6.1% compared with the same period last year.

Propane stocks are up 2.4 million barrels

Propane/propylene inventories on the week were 63.6 million barrels (“10% below the five-year average”), higher by 2.4 million on the week and up 1.4 million versus last year.

Total US refinery crude inputs on the week averaged 17.7 million b/d, off 100,000 to 96.7% of capacity. In PADD 3 (the Gulf Coast) runs were lower by 0.6% percentage points to 97%.

Net exports of all products were 1.67 million b/d, off 1.236 million, a bearish number.

The US typically needs to export products to keep inventories manageable: while domestic gasoline demand was put at 9.6 million b/d, total gasoline production came in at 10.699 million; distillate demand was 3.8 million b/d, production at 5.442 million.

Crude exports fall 309,000 barrels

Exports of crude oil were 2.027 million b/d, off 309,000 from last week; one year ago the figure was 918,000. -- Robert Sharp

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