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S&P Global Platts Preview of U.S. EIA Data: Likely to Show Crude Stocks Fell 4.3 Million

  • Commodity Oil

Supply disruptions from Libya, Iran, Venezuela and Canada have combined with falling US crude stocks to keep a floor under oil prices, despite Saudi Arabia's efforts to boost OPEC production to offset those losses, according to an S&P Global Platts preview of this week's pending U.S. Energy Information Administration (EIA) oil stocks data.

Survey of Analysts Results:

(The below may be attributed to the S&P Global Platts survey of analysts)

  • Crude stocks expected to fall 4.5 million barrels
  • Gasoline stocks expected to fall 2.5 million barrels
  • Distillate stocks expected to fall 250,000 barrels
  • Refinery utilization expected to rise 0.2 percentage point

S&P Global Platts Analysis:

(The below may be quoted in part or full, with attribution to S&P Global Platts Oil Futures Editor Geoffrey Craig)

With US crude exports and refinery runs hitting record highs the week ending June 22, US crude stocks have sunk further below the five-year average, according to Energy Information Administration data.

That has amplified a sense among traders that the global market is tightening, which explains the higher oil prices. ICE September Brent was $77.70/b Monday afternoon, while NYMEX August crude was $74.10/b.

Analysts surveyed Monday by S&P Global Platts expect crude stocks fell last week by 4.5 million barrels.

That would slightly exceed the average draw of 4.3 million barrels seen for the same period in 2013-17. Crude stocks typically fall at this time of year as refiners run hard to meet summer demand.

Inventories have fallen four of the last six weeks by a total of 19.3 million barrels, including a massive draw of 9.89 million barrels the week ending June 22, the largest since September 2016.

That pulled inventories 3.6% below the five-year average, the biggest hole since stocks flipped from a surplus to deficit in mid-March. A year ago, inventories sat 26.7% above the five-year average.

One factor behind the drawdown has been US crude exports, which have shot higher to help fill the void left in Europe and Asia by the voluntary and involuntary reductions from OPEC producers.

Crude exports averaged 3 million b/d the week ending June 22, an all-time high. Exports have averaged 1.79 million b/d so far this year, which was more than 1 million b/d more than the same period in 2017.

While the OPEC/non-OPEC coalition has pledged to raise output by 1 million b/d starting in July, that does not necessarily mean US exports will decline rapidly either.

One barometer for US crude exports is the ICE Brent/WTI spread. A wider spread creates an incentive for US producers to sell oil overseas in order to capture higher prices abroad.

That spread blew out to more than $11/b June 7, the widest it has been since early 2015 before legal restrictions on US exports were lifted.

The differential narrowed sharply last week, settling as low as $4.40/b on Thursday. The ICE Brent/WTI spread was around $5.85/b Monday.

This is still within the $3/b-$7/b range seen from August until mid-May when US crude exports hit record highs on several occasions.

Further, a tight global market because of ongoing disruptions in Venezuela, Libya and potentially Iran down the road could place the onus on US production to help fill any voids.

Looming US sanctions

US Secretary of State Mike Pompeo told lawmakers last week that sanctions on Venezuela's oil sector could be imposed despite the potential for a negative impact on US Gulf Coast refiners.

Sanctions would likely further hurt Venezuelan production, which has already fallen by 910,000 b/d over the last two years to 1.36 million b/d in May, according to the latest S&P Global Platts OPEC survey.

Also last week, a senior State Department official said the US has no plans to issue sanctions waivers for countries buying Iranian crude, urging them to halt imports by November 4.

On the heels of Ambassador Nikki Haley's visit to New Delhi, India's oil ministry instructed state-run refiners to purchase alternatives to Iranian crude, which had been India's third-largest crude oil supplier.

While in Libya, force majeure has been declared on loadings from the country's eastern terminals of Zueitina, Marsa el-Hariga, Ras Lanuf and Es Sider as rivals fight for control over exports.

The loss of Libyan crude has been felt in the Mediterranean oil market, where refiners are looking for substitutes, turning to grades such as the North Sea's Ekofisk and Russian Urals.

Syncrude closure

Meantime, North America is grappling with a supply loss of its own after Canada's Syncrude production unexpectedly shut down last month.

Stocks at Cushing, Oklahoma -- delivery point for the NYMEX crude contract -- could tighten further as a result.

Inventories at Cushing have drawn six straight weeks to 29.893 million barrels. If stocks fall by another 1.7 million barrels, the amount of crude in storage will be the smallest it has been since December 2014.

The Syncrude disruption also coincides with a slowdown in US oil drilling as well as increased refinery demand.

The amount of crude processed by refineries rose 115,000 b/d to 17.816 million b/d the week ending June 22, the highest level on record, according to EIA data going back to 1982.

Analysts surveyed Monday expect the refinery utilization rate to have inched 0.2 percentage point higher last week to 97.7% of capacity. A year ago, the utilization rate averaged 93.6%.

The survey also found gasoline stocks were likely to have declined by 2.5 million barrels, while distillate stocks were expected to have fallen by 250,000 barrels.

For more information on crude oil, visit the S&P Global Platts website.

S&P Global Platts Media Contact update

Americas: Kathleen Tanzy, +1 917 331 4607,
Asia: Melissa Tan, +65-6597-6241,
EMEA: Alex Brog, +44 20 7176 7645, and Russ Gerry, +44 207 176 3569,

About S&P Global Platts

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S&P Global Platts is a division of S&P Global (NYSE: SPGI), which provides essential intelligence for individuals, companies and governments to make decisions with confidence. For more information, visit

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  • Commodity
  • Oil