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POST DOE WRAP: NYMEX futures are crushed after crude, products inventory gain

HOUSTON, June 7, 2017 (PCW) -- NYMEX crude and products futures prices were markedly lower Wednesday after government figures showed an increase in crude stocks, in gasoline and in distillates.

The US remains long in crude, gasoline, and diesel. Refinery crude inputs nationwide were lower and exports of products decreased; domestic gasoline consumption remained below last year. Exports, so vital to the health of refinery margins, dropped.

As of 10:13 am CDT, July NYMEX WTI fell $02.09/bbl to $46.10/bbl; July gasoline dropped 5.99 cpg to 149.46 cpg; and May diesel decreased 4.35 cpg to 142.27 cpg.

Crude inventories are up first time in nine weeks

The US Energy Information Administration statistics for the week ending June 2 showed a 3.3 million barrel increase in crude inventories to 513.2 million barrels (“in the upper half of the average range,” per the EIA). This is the first week in the last nine in which inventories have increased.

Domestic crude oil production was put at 9.318 million b/d, down 24,000 for the week, and 573,000 higher versus the same period last year.

Imports of crude were up 356,000 b/d to about 8.3 million b/d on the week. Over the past four weeks, crude imports averaged 8.3 million b/d, an increase of 8.8% compared to last year at this time.

Gasoline imports increase

Total gasoline imports were put at 787,000 b/d, up from 703,000 the previous week; for the same period last year the figure was 815,000. Distillate imports were 152,000 b/d, up from 105,000 on the week. The figure for last year was 167,000 b/d (typically the US imports products to the US East Coast and exports from the US Gulf Coast).

Total product demand over the past four weeks was put at 20.1 million b/d, down by 1.2% versus the same period last year.

Total gasoline inventories (including blendstocks) were up 3.3 million barrels to 240.3 million (“above the upper limit of the average range,” per the EIA), 0.7 million above last year. Demand was 9.6 million b/d over the past four weeks, off 0.7% from the same period last year.

Distillate stocks increase

Distillate stocks totaled 151.1 million barrels (“near the upper limit of the average range”), up 4.4 million compared with last week, and 0.3 million below last year. Distillate demand over the past four weeks was 4.0 million b/d, up 1.8% compared with the same period last year.

Propane/propylene inventories on the week were 50.4 million barrels (“in the lower half of the average range”), up 3.3 million on the week, and lower by 26.9 million versus last year.

Total US refinery crude inputs averaged 17.2 million b/d, lower by 0.9 percentage points to 94.1%. In the Gulf Coast, refinery runs were down 1.6 percentage points to 95.7% of capacity.

Exports are lower

Also, net exports of all products were put at 2.268 million b/d, off 425,000 for the week, probably a bearish number. The US 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 9.934 million b/d. Distillate demand was 4.0 million b/d, but production was 5.267 million. -- Robert Sharp

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