US crude inventory builds extend amid lasting polar vortex impacts to refiners

New York — US crude inventory builds extended in the week ended March 19, US Energy Administration data showed March 24, as refinery runs continued to see lingering effects from the mid-February polar vortex.

Commercial crude stocks climbed 1.91 million barrels last week to 502.71 million barrels, leaving stocks 6.4% above the five-year average for this time of year.

The build was concentrated on the US Gulf Coast, which saw inventories rise 5.39 million barrels to 293.57 million barrels.

Inventories at the NYMEX delivery point of Cushing Oklahoma saw a 1.94 million-barrel draw, the largest one-week slide since mid-February.

Futures markets were undeterred by the build, which was in line with recent expectations. American Petroleum Institute data released late March 23 showed crude inventories up 2.93 million barrels over the period.

NYMEX May WTI settled March 24 up $3.42 at $61.18/b and ICE May Brent climbed $3.62 to $64.41/b.

It was the fifth consecutive week of crude inventory builds fueled in large part by a refinery complex that has struggled to reach full capacity in the wake of February's deep freeze. While the bulk of units taken offline have now been returned to service, refiners are still plagued with vestiges of extreme cold on equipment not designed for such weather, including pipeline leaks, snags on process units, and boiler problems hampering restarts.

Nationwide refinery utilization climbed 5.5 percentage points to 81.6% of capacity in the week, and net crude inputs were up 960,000 b/d at 14.39 million b/d. The increase left utilization just 1.5 percentage points behind levels seen ahead of the February freeze, though still 6.5% behind the five-year average. But USGC refinery utilization was still 7.6 percentage points below its pre-storm peak.

Crude production, which had largely shrugged off the impacts of the polar vortex by early March, pushed to 11 million b/d last week, the strongest since the week ended Feb. 5.

Crude stocks were further padded by a slowdown in US crude exports, which averaged 2.48 million b/d, down 40,000 b/d from the week prior. The four-week moving average of exports moved up by about 40,000 b/d to 2.5 million b/d but was still holding near levels last seen in August 2019.

Gasoline stocks climb amid import surge

Total US gasoline stocks climbed 200,000 barrels to 232.28 million barrels last week. The counter-seasonal build narrowed the deficit to the five-year average to 3.7% from 5% the week prior.

The build comes amid a second week of strong import activity. Total gasoline imports edged up 29,000 b/d to 940,000 b/d, a fresh eight-month high.

NYMEX April RBOB settled 9.26 cents higher March 24 at $1.9890/gal, and April ULSD climbed 7.67 cents to $1.8256/gal.

US Atlantic Coast gasoline imports averaged 750,000 b/d, the highest since early October. On the USGC, which typically sees negligible inflows due to the high density of refiners in the region, imports reached 170,000 b/d, the highest since July 2019.

The USAC import surge held regional gasoline draws to just 110,000 barrels, narrowing the deficit to the five-year average to 0.6% from 2.8% the week prior.

Implied demand for gasoline was up 170,000 b/d to 8.62 million b/d, pushing the four-week moving average to a four-month high 8.48 million b/d.

But total refined product demand was down around 1.2% on the week at 18.7 million b/d. This downturn was led by a 440,000 b/d slide in distillate demand to an 11-week low 3.59 million b/d.

Total distillate stocks climbed 3.81 million barrels to 141.55 million barrels, putting stocks above the five-year average for the first time since the week ended Feb. 19.