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POST DOE WRAP: Crude drops after sixth weekly inventory gain

HOUSTON, October 31, 2018 (PCW) -- NYMEX crude and products settled lower Wednesday after government figures showed a significant rise in crude inventories.

December NYMEX WTI fell $0.87/bbl to $65.31/bbl. It was the lowest close since Aug. 23. December gasoline dropped 5.09 cpg to 175.14 cpg, and November diesel decreased 0.80 cpg to 225.14 cpg.

Gasoline stocks were down on the week and diesel decreased as well; its stocks are now below last year, as we head to winter (about 20% of diesel demand is for heating oil). Exports of crude and products look very good, a bullish sign.

Crude inventories rise 3.2 million barrels

The US Energy Information Administration statistics for the week ended October 26 showed a 3.2 million barrel increase in commercial crude inventories to 426 million barrels (“2% above the five-year average” per the EIA). It was the sixth straight weekly gain, putting supplies at the highest level since the week ended June 15.

Domestic crude oil production was put at 11.2 million b/d, up 300.000 on the week and up 1.647 million versus the same period last year.

Imports of crude were off 334,000 b/d on the week to 7.3 million. Over the past four weeks, crude imports averaged 7.5 million b/d, off 2.5% compared with last year at this time.

Total gasoline imports were put at 363,000 b/d, up from 331,000 last week; for the same period last year the figure was 540,000. Distillate imports were 141,000 b/d, down from 163,000 on the week; the figure for last year was 137,000 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 rises 5.4%

Total product demand over the past four weeks was put at 20.6 million b/d, up 5.4% versus the same time last year.

Total gasoline inventories (including blendstocks) were down 3.2 million barrels to 226.2 million (“6% above the five-year average”), and 12.5 million above last year. Gasoline demand was 9.2 million b/d over the past four weeks, down 1.5% from the same period last year.

Distillate stocks totaled 126.3 million barrels (“5% below the five-year average”), off 4.1 million on the week, and 2.6 million below last year. Distillate demand over the past four weeks was 4.2 million b/d, up 14.2% compared with the same period last year.

Propane/propylene inventories on the week were 83 million barrels (“3% below the five-year average”), up 1 million on the week and up 4.7 million versus last year.

Total US refinery crude inputs on the week averaged 16.4 million b/d, up 149,000 b/d to 89.4% of capacity. In PADD 3 (the Gulf Coast) runs were up 0.6% percentage point to 96.5% of capacity.

Net exports of all products were 3.655 million b/d, up 12,000 on the week, still a very bullish number.

The US needs to export products to keep inventories manageable: while domestic gasoline demand was put at 9.2 million b/d, total gasoline production came in at 10.364 million; distillate demand was 4.2 million b/d, production at 4.983 million.

Crude exports rise 665,000 barrels

Exports of crude oil were 2.845 million b/d, higher by 665,000 on the week; one year ago the figure was 2.133 million. -- Robert Sharp

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