US crude stocks expected to see seasonal uptick, but strong refinery demand likely blunts build

US crude oil inventories likely climbed during the week ended April 22, analysts surveyed by S&P Global Commodity Insights said April 25, but strong refinery demand likely blunted the seasonal build.

Total commercial crude stockpiles are expected to have increased 1.7 million barrels to around 415.4 million barrels last week, analysts said. The forecast build is less than half the 3.5 million-barrel increase averaged over the past five years and would leave stocks 15.2% behind the five-year average of US Energy Information Administration data, out from 14.9% the week prior.

Strong refinery appetite likely capped the build. Nationwide refinery utilization is expected to remain steady at around 91% of capacity, analysts said, over 6% above normal for this time of year.

Downstream refinery utilization has been supported by strong refined product cracks. The US Gulf Coast Platts ULSD crack versus WTI averaged almost $50/b in the five days ended April 22, up nearly $7/b from the week prior, while the Platts USGC unleaded 87 crack versus WTI averaged north of $30/b over the same period.

Strong product cracks have in turn supported robust whole-barrel margins. US Gulf Coast WTI MEH cracking margins averaged $33.52/b in the five days ended April 22, S&P Global data shows, compared to $30.77/b to date in April.

Still, refinery net crude demand, while seasonally strong, is lagging utilization rates. Net crude inputs are forecast by S&P Global to average around 15.84 million b/d, 1.4% above normal.

Total gasoline stockpiles likely increased 700,000 barrels over the period to around 233.1 million barrels, analysts said. The build would leave them 2.8% behind the five-year average, in from 3% below average the week prior.

Distillate stocks likely moved lower for a third straight week, with analysts seeing inventories down 500,000 barrels to a fresh 14-year low of around 108.2 million barrels.

Despite tight domestic diesel stocks, ship-tracking service Kpler shows the four-week moving average of USGC ULSD exports in the week ended April 22 reached 4.84 million b/d, the highest since August 2020.

A key metric for the EIA report will be US Atlantic Coast diesel stocks, which have become especially tight at almost 40% behind the five-year average in the week to April 15. Kpler data shows weekly USAC diesel imports at 350,000 barrels, down from 580,000 barrels the week prior.