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POST DOE WRAP: NYMEX futures fall hard after products inventory increase

HOUSTON, June 14, 2017 (PCW) -- NYMEX crude and products futures prices were crushed Wednesday after government figures showed an increase in gasoline and in distillate stocks, and a small decrease in crude.

The US remains long in crude, gasoline, and diesel. Refinery crude inputs nationwide were higher and exports of products increased; domestic gasoline consumption remained below last year. Exports, so vital to the health of refinery margins, increased.

However, gasoline stocks were 5.4 million barrels over last year and 24.6 million over 2015.

As of 10:01 am CDT, July NYMEX WTI fell $1.45/bbl to $45.01/bbl; July gasoline 4.57 cpg to 145.38 cpg; and May diesel decreased 2.63 cpg to 142.14 cpg.

Crude inventories are down

The US Energy Information Administration statistics for the week ending June 9 showed a 1.7 million barrel decrease in crude inventories to 511.5 million barrels (“in the upper half of the average range,” per the EIA). This is the ninth week in the last ten in which inventories have decreased.

Domestic crude oil production was put at 9.330 million b/d, up 12,000 for the week, and 614,000 higher versus the same period last year.

Imports of crude were down 316,000 b/d to about 8.0 million b/d on the week. Over the past four weeks, crude imports averaged 8.2 million b/d, an increase of 7.1% compared to last year at this time.

Gasoline imports decrease

Total gasoline imports were put at 574,000 b/d, down from 787,000 the previous week; for the same period last year the figure was 747,000. Distillate imports were 61,000 b/d, down from 152,000 on the week; the figure for last year was 123,000 b/d (typically the US imports products to the US East Coast and exports from the US Gulf Coast).

Total product demand over the past four weeks was put at 20.1 million b/d, down by 1.2% versus the same period last year.

Total gasoline inventories (including blendstocks) were up 2.1 million barrels to 242.4 million (“above the upper limit of the average range,” per the EIA), 5.4 million above last year. Demand was 9.5 million b/d over the past four weeks, off 1.2% from the same period last year.

Distillate stocks increase

Distillate stocks totaled 151.4 million barrels (“near the upper limit of the average range”), up 0.3 million compared with last week, and 0.7 million below last year. Distillate demand over the past four weeks was 4.0 million b/d, up 4.1% compared with the same period last year.

Propane/propylene inventories on the week were 52.8 million barrels (“in the lower half of the average range”), up 2.4 on the week, and lower by 25.6 million versus last year.

Total US refinery crude inputs averaged 17.3 million b/d, up 29,000 b/d, to 94.4% of capacity, up 0.3 percentage points. In PADD 3 (the Gulf Coast) runs were up 0.7 percentage points to 96.4%.

Exports are higher

Also, net exports of all products were put at 2.657 million b/d, up 389,000 for the week, a moderately bullish number. The US needs to export products to keep inventories manageable.

While domestic gasoline demand was put at 9.5 million b/d, total gasoline production came in at 9.843 million b/d. Distillate demand was 4.0 million b/d, but production was 5.154 million. -- Robert Sharp

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