US distillate stocks edge lower despite strong refinery margins

US distillate fuel oil stocks likely fell to multiweek lows during the week to Oct. 9 as global demand drives exports, analysts surveyed by Platts, part of S&P Global Energy, said Oct. 12.

Nationwide distillate stocks likely declined 33,000 barrels to about 104.8 million barrels during the period, the analysts said. The fifth straight weekly draw would put stockpiles 9.8% behind the seasonal five-year average of US Energy Information Administration data and leave them at the lowest outright level since Aug. 28, Platts data showed.

US distillate imports dropped to 118,000 b/d the prior week, while exports increased by 260,000 b/d to 1.79 million b/d, according to S&P Global Energy CERA data.

Month to date, diesel and gasoil exports have averaged 1.9 million barrels/day in October, data from S&P Global Commodities at Sea showed, up from 1.4 million b/d in September.

US gasoline stocks likely fell 680,000 barrels to 204.1 million barrels, the analysts said, narrowing the deficit to the seasonal five-year average to 5.6%. Nationwide refinery utilization likely climbed, the analysts said, declining 0.15 percentage point to 94.2% of capacity.

US refinery margins remain strong. The USGC WTI MEH cracking margin averaged $54.61/b during the week to Oct. 9, up from $50.13/b for the full month of September, CERA data showed.

ULSD cracks are also strong, surpassing record highs of September. The USGC ULSD crack versus WTI MEH climbed to $104.45/b last week from a September average of $101.03/b.

Gasoline cracks, according to CERA data, fell to $56.46/b while jet fuel crack climbed to $96.81/b during the week to Oct. 9 from a September average of $53.97/b and $86.77/b, respectively, in September, the CERA data showed.

US crude stocks likely fell 2.54 million barrels to 421.6 million barrels, the analysts said, putting stocks roughly on par with the EIA's five-year average.