EIA data shows US crude stocks fall amid refinery rebound, import decline

New York — US crude inventories declined in the week ended Sept. 14 as refinery demand rebounded following Hurricane Laura and imports flagged, US Energy Information Administration data showed Sept. 16.

Commercial crude inventories declined 4.39 million barrels during the week ended Sept. 11 to 496.05 million barrels, EIA said, putting stockpiles 13.3% above the five-year average, in from 14.4% the week prior.

Crude stocks fell in all regions outside of the Rockies, but the draw was centered on the US Gulf Coast, where inventories drew 2.78 million barrels lower to 266.62 million barrels.

NYMEX October WTI settled $1.88 higher at $40.16/b and ICE November Brent was up $1.69 on the day to settle at $42.22/b.

West Coast stocks fell 1.3 million barrels. Notably, the USWC draw was realized entirely in a decline in oil in transit from Alaska, which fell 2.5 million barrels last week. When discounting oil in transit, USWC onshore crude stocks were actually 1.21 million barrels higher last week.

Total refinery net crude inputs climbed 700,000 b/d to 13.49 million b/d as utilization rates jumped 4 percentage points to 75.8% of capacity. An 820,000 b/d uptick in USGC inputs accounted for most of the bound, as regional refiners ramped up production in the wake of Hurricane Laura, which took 2.34 million b/d of refinery capacity offline as it made landfall as a category 4 storm along the Texas-Louisiana border Aug. 27.

Despite the uptick, USGC refinery crude demand remains around 14% below pre-Laura levels, as two refiners -- Citgo's 418,000 b/d Lake Charles plant and Phillips 66's 260,000 b/d Westlake facility -- remain offline due to storm damage.

Refinery runs are likely to remain depressed throughout the fall as the impact of tropical storm activity exacerbates shoulder-season refinery maintenance. Phillips 66 shut production at its 255,600 b/d Alliance refinery in Belle Chasse, Louisiana and Shell's 240,000 b/d Norco refinery was operating at reduced capacity this week as the region braced for Hurricane Sally, which made landfall in Alabama a category 2 storm early on Sept. 16.

Meanwhile, Phillips 66 has said that its Westlake refinery can be operational within two weeks of electricity returning to the plant, but power supplier Entergy has yet to provide a firm date due to the catastrophic damage to major infrastructure from the storm. Market sources said the plant is expected to be fully operational by early December.

USGC offline crude distillation capacity is not expected to fall below 1.64 million b/d seen in the week ended Aug. 21, ahead of the Hurricane Laura shutdowns, until the week ended Oct. 23, Platts Analytics data shows.

Nationwide crude imports were down 420,000 b/d on the week at 5 million b/d, pushing the four-week moving average down to 5.31 million b/d - the weakest since April 1991.

This decline in imports offset a 350,000 b/d slide in exports, which averaged at 2.60 million b/d last week. Despite the weekly slide, the upward trend in exports remains intact. The four-week moving average edged 110,000 b/d higher to 2.98 million b/d, putting it roughly 260,000 b/d above its mid-June nadir.

Asia-bound exports were the strongest since the week-ended Aug. 14 after climbing 1.48 million b/d to 2.01 million b/d, according to data intelligence firm Kpler. Crude flows to Europe, in contrast, fell by around 645,000 b/d to 599,192 b/d, Kpler data showed, putting them at the lowest since mid-June.

PRODUCT STOCKS DIVERGE AMID TEPID DEMAND

Nationwide gasoline stocks dipped 380,000 barrels to 231.52 million barrels, narrowing the surplus to the five-year average to 2.8%, the lowest since mid-March.

Weekly gasoline supplied, a proxy for demand, edged up 90,000 b/d to 8.48 million b/d, putting it roughly 5% behind year-ago levels. But the four-week moving average of gasoline demand edged down for a fourth straight week, falling 40,000 b/d to 8.7 million b/d, a six-week low.

Distillate stocks, in contrast, were testing multi-decade highs after climbing 3.46 million barrels higher to 179.31 million barrels. The build put stocks more than 31% above the five-year average and left them just 670,000 barrels shy of the 38-year high reached in late-July.

NYMEX October RBOB settled 5.08 cents higher at $1.1889/gal and October ULSD climbed 1.7 cents higher to settle at $1.1163/gal.