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POST DOE WRAP: Futures rise after crude, gasoline inventory drop

HOUSTON, July 12, 2017 (PCW) -- NYMEX crude and products futures prices were moderately higher Wednesday after government figures again showed a significant decrease in crude stocks.

The US remains long in crude, gasoline and diesel, but some will no doubt see the inventory drops as signaling a change in what has been a largely bearish market.

As of 10:02 am CDT, August NYMEX WTI rose $0.37/bbl to $45.41/bbl; August gasoline rose 0.90 cpg to 152.73 cpg and August diesel increased 0.37 cpg to 147.87 cpg.

Refinery crude inputs nationwide were higher and exports of products increased. Domestic gasoline consumption remained below last year, but not by much.

Gasoline inventories drew as stocks were 4.4 million barrels below last year and 17.7 million over 2015; both numbers have moved in a bullish direction.

Crude inventories down 7.6m barrels

The US Energy Information Administration statistics for the week ending July 7 showed a 7.6 million barrel decrease in crude inventories to 494.5 million barrels (“in the upper half of the average range,” per the EIA). This is the 12th week in the last 15 in which inventories have decreased.

Over the past two weeks, inventories have drawn 13.9 million barrels.

Domestic crude oil production was put at 9.397 million b/d, up 59,000 b/d for the week, and 912,000 b/d higher versus the same period last year.

Imports of crude were down 132,000 b/d to about 7.6 million b/d on the week. Over the past four weeks, crude imports averaged 7.8 million b/d, a decrease of 3.0% compared to last year at this time.

Gasoline imports decrease tp 528,000 b/d

Total gasoline imports were put at 528,000 b/d, down from 739,000 b/d the previous week; for the same period last year the figure was 820,000 b/d. Distillate imports were 125,000 b/d, up from 108,000 b/d on the week; the figure for last year was 57,000 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 20.7 million b/d, up 2.8% versus the same period last year.

Total gasoline inventories (including blendstocks) were off 1.6 million barrels to 235.7 million barrels (“in the upper limit of the average range,” per the EIA), 4.4 million below last year. Demand was 9.7 million b/d over the past four weeks, off 0.3% from the same period last year.

Distillate stocks totaled 153.6 million barrels (“above the upper limit of the average range”), up 3.1 million barrels compared with last week, and 0.6 million barrels above last year. Distillate demand over the past four weeks was 4.1 million b/d, up 8.8% compared with the same period last year.

Propane inventories up 1.7m barrels

Propane/propylene inventories on the week were 62.2 million barrels (“in the lower half of the average range”), up 1.7 million barrels on the week, and lower by 25.1 million barrels versus last year.

Total US refinery crude inputs averaged 17.2 million b/d, higher by 103,000 b/d, to 94.5% of capacity, up 0.9 percentage points. In PADD 3 (the Gulf Coast) runs were up 1.4 percentage points to 95.1%.

Also, net exports of all products were put 2.891 million b/d, up 0.834 million b/d for the week, a bullish number. The US needs to export products to keep inventories manageable.

While domestic gasoline demand was put at 9.7 million b/d, total gasoline production came in at 10.469 million b/d. Distillate demand was 4.1 million b/d, but production was 5.349 million b/d. -- Robert Sharp

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