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POST DOE WRAP: Crude stocks rise for first time since May as prices fall

HOUSTON, July 27, 2016 (PCW) -- NYMEX crude and products futures prices were lower early Wednesday after government figures showed the first increase in crude stocks since May and a modest increase in production week-on-week; crude production is still lower vs last year.

The US remains long in crude, gasoline and diesel. Refinery crude input volumes rose nationwide. Domestic gasoline demand remains robust, but export volumes of products were not bullish.

As of 9:55 am CST, August NYMEX WTI fell $0.89/bbl to $42.03/bbl, August gasoline fell 1.71 cpg to 132.81 cpg, but August diesel rose 2.38 cpg to 130.22 cpg.

Crude inventories increase

The US Energy Information Administration statistics for the week ending July 22 showed a 1.7 million barrel increase in crude inventories to 521.1 million barrels. It was the first gain since the week ended May 13. Domestic crude oil production was put at 8.515 million b/d, up 21,000 b/d for the week, but 0.898 million b/d lower versus the same period last year.

This is the third week in a row that crude production has risen on a week to week basis (inventories still are “historically high” for this time of year, per the EIA).

Imports of crude were up 303,000 b/d to 8.4 million b/d on the week. Over the past four weeks, crude imports averaged 8.2 million b/d, an increase of 8.7% compared to last year at this time.

Total product demand over the past four weeks was put at 20.2 million b/d, up 0.7% versus the same period last year.

Gasoline inventories rise

Total gasoline inventories (including blendstocks) were up 0.5 million barrels to 241.5 million (still “well above the upper limit of the average range,” per the EIA). Demand was 9.8 million b/d over the past four weeks, up 2.6% from the same period last year.

Distillate stocks fell 0.8 million barrels to 152.0 million barrels (“well above the upper limit of the average range,” per the EIA). Distillate demand over the past four weeks was up 0.2 % to 3.7 million b/d compared to the same period last year.

Propane/propylene inventories on the week were up 2.2 million barrels to 89.6 million barrels, down 0.2 million barrels versus last year.

Refinery runs are off slightly

Total US refinery inputs averaged 16.8 million b/d,. down 277,000 b/d compared to the previous week. Inputs of crude oil nationwide to refineries on a percentage basis were down 0.8% on the week, put at 92.4% of capacity. In the Gulf Coast (PADD III), inputs were down 0.2% to 93.4%.

Also, net exports of all products were put at 1.542 million b/d, up 94,000 b/d for the week, still a bearish number. The US needs to export products to keep inventories manageable.

While gasoline demand was put at 9.8 million b/d, gasoline production came in at 10.068 million b/d. Distillate demand was 3.7 million b/d, but production was 4.918 million b/d. -- Robert Sharp

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