US Weekly Oil Data

US Inventories, Exports, Imports, and Refinery Utilization (11 Charts).

MAIN TAKEAWAYS

• While crude, gasoline, and distillate inventories followed historical trends, the decrease was less than expected and much lower than what the API reported. Yesterday the API reported a decrease of 3.4 mb in crude oil inventories. 

• The EIA reported the highest weekly demand this year at 21.592 mb/d but remained below the upper limit of the 5-year average.  Weekly demand data contains a lot of noise and not reliable, but this week demand number caught our eye since the EIA has been revising up demand data in its monthly figures. 

• Last week we predicted that the EIA would show a decrease in imports, which is confirmed by today’s data. Last week we wrote: “We pointed out last week that the EIA data is kind of playing catch up with the market as customs data is behind market data. For example, the EIA showed an increase in imports last week. That reflects the week before. Last week, according to Kepler, indicated a decrease, which will show up in next week’s EIA data.”

  It seems this problem will remain with us. 

• We reiterate that the data in Figure (1) might look bullish to some people since the current level of inventories is close to the bottom of the 5-year range. But the fact is, it is not that bullish. The 5-year range is heavily influenced by the massive build in 2020 during Covid-19 lockdowns. Inventory levels in 2018 when prices exceeded $85/b were significantly lower than the bottom of the current range. 

• Finally, this is just a reminder that we need to see crude inventories declining toward the 400 mb market to change our view from neutral to bullish. Do not be fooled by inventories being close to the bottom of the 5-year range.   

IN DETAIL