Platts Pre-Report Analyst Survey of EIA/API Estimates Suggests a Build of 2 million barrels in US Oil Stocks
Platts Survey of Analysts
- Crude oil stocks up 2 million barrels
- Gasoline stocks up 1.1 million barrels
- Distillates stocks up 900,000 barrels
- Refinery utilization or run rate down 0.3 percentage points to 86%
New York, NY - December 2, 2008
Analysts expect a 2 million barrel build in US commercial crude oil stocks when the US Energy Information Administration (EIA) and American Petroleum Institute (API) release weekly data Wednesday, a Platts survey showed Tuesday. The EIA/API data is scheduled to be reported Wednesday at 10:35 a.m. ET/15:35 GMT.
"Crude imports may continue to surprise on the upside as the contango in the front of the NYMEX curve is steep enough to provide the economic incentive to store barrels," said Linda Rafield, Platts senior oil analyst and editor of Platts Futures & Derivatives Review.
Contango is when nearby prices are lower than those of later months. The price spread between the New York Mercantile Exchange's January and February contracts traded out to as low as minus $1.39 per barrel last week. US crude imports surged 1.088 million b/d to 10.959 million b/d the week ending November 21, according to EIA. "But that is a level of crude imports that is generally not sustainable, particularly at end year when tax considerations keep tankers out at sea," Rafield added.
A decline in refinery utilization is likely to result in another build in crude stocks. Analysts project a decrease of 0.3 percentage points to 86%, based on last week's EIA data.
Analysts also anticipate a build of 1.1 million barrels in gasoline inventories despite an uptick in demand ahead of the US Thanksgiving holiday weekend. But even if demand were to climb back above 9 million barrels per day, the increase is unlikely to be enough to draw on stocks, assuming a constant level of imports and production.
Analysts look for a build of 900,000 barrels in middle distillate stocks for the latest reporting week. "Given the still aggressively-priced heating oil crack spread on NYMEX, refiners still have the incentive to maximize distillate production," Rafield said. Refiners pushed distillate yields back over 30% the week ending November 21.