US crude oil inventories expected higher amid slower refinery runs

US crude oil inventory builds likely extended in the week ended Oct. 25, according to an S&P Global Commodity Insights survey of analysts, amid an expected downturn in refinery demand.

US commercial crude stocks likely climbed 800,000 barrels to around 426.8 million barrels, analysts said, leaving stocks around 4% behind the five-year average of US Energy Information Administration data.

The build comes amid an expected 0.5 percentage point slide in refinery utilization to around 89% of capacity.

Refinery runs remain well above year-ago levels amid subdued seasonal turnaround activity. Despite the expected downturn, total utilization is still expected to be around 3.6 percentage points compared with the same period last year and around 5% above the five-year average for this time of year.

Maintenance has taken around 1.3 million b/d of refinery capacity offline this month, Commodity Insights data showed. Outages are expected to peak in October.

Valero Energy plans to boost run rates in the fourth quarter amid expectations of stronger margins supported by lower inventories, improving diesel demand and wider sour crude differentials due to supply increases, a company executive said Oct. 24.

The US Gulf Coast WTI MEH cracking margin averaged $7.77/b in the five-days ended Oct. 25, Commodity Insights data showed, down compared with an October-to-date average of $8.75/b.

Analysts forecast draws in key refined product inventories against this backdrop of slower refinery runs.

Nationwide gasoline stocks likely declined 1.1 million barrels to around 212.5 million barrels, analysts said, leaving them 11 million barrels behind year-ago levels and at the lowest level since November 2022.

Distillate stocks, meanwhile, likely declined 1.4 million barrels to 112.4 million barrels, a ten-month low.