US crude inventories likely lower as refinery runs hold, exports grow

New York — US crude inventories likely continued to fall in the week ended Feb. 12, as refinery runs were stable while crude exports climbed, analysts surveyed by S&P Global Platts said Feb. 16

Commercial crude stocks are expected to have fallen 3.4 million barrels, putting inventories at 465.6 million barrels, on par with the five-year average, according to US Energy Information Administration data.

The EIA will release its data Feb. 18, delayed by one day because of a federal holiday.

US crude stocks have fallen roughly 34 million barrels since the week ended Dec. 4, when inventories were at an 11% surplus to the five-year average, as refineries have been boosting runs since mid-October.

Refiners have been responding to signs of higher gasoline and diesel demand as coronavirus restrictions have eased.

Analysts polled by Platts were looking for refinery runs to remain stable or edge slightly higher. S&P Global Platts Analytics estimates US crude runs to average 14.83 million b/d, up from 14.8 million b/d the week ended Feb. 5.

The expected crude stock draw could be even higher in the near term as Texas and New Mexico output has fallen because of below freezing temperatures. The bulk of those production losses occurred after the reporting period for the EIA data, so those cuts would show up in the subsequent week's data.

According to Platts Analytics, at peak, around 3 million-4 million b/d of oil output was impacted by the weather starting Feb. 15.

A boost in US crude exports could also help draw down inventories. Kpler ship tracking data shows 17.09 million barrels of crude was exported from the US last week, up from 15.14 million barrels the prior week.

Analysts polled by Platts were looking for US gasoline inventories to have climbed in week ended Feb. 12 by 2.2 million barrels as refiners hold runs steady or inch higher, while US distillate stocks are expected to have tightened by 2.2 million barrels.

Frigid temperatures likely bolstered demand for distillates. A 2.2 million-barrel draw would put US inventories at 158.9 million barrels, tightening the surplus to the five-year average slightly to 5.9%.

A tightening of US Atlantic Coast inventories could be bullish for the New York-delivered NYMEX ULSD contract. USAC stocks were at 55.9 million barrels the week ended Feb. 5, a 6% surplus to the five-year average. That surplus has tightened from 29% at the end of October.

A gasoline stock build of 2.2 million barrels would put US inventories at 258.9 million barrels, roughly on par with the five-year average. US gasoline inventories have trended 31 million barrels higher since early November, which is typical for this time of year.