In an oil and gas report sent to Rigzone late Monday, Macquarie strategists said they forecast U.S. crude inventories to rise by 3.7 million barrels for the week ending August 9.
“This compares to our initial forecast for the week, where we expected an increase of 3.3 million barrels and a decline of 3.7 million barrels for the week ending August 2,” the strategists said in the report.
“For this week, we model virtually flat crude oil output for refineries. For net imports, we model a moderate nominal increase, with exports lower (-0.3 million barrels per day) and imports slightly higher (+0.2 million barrels per day),” they added.
Strategists warned that the timing of cargoes will remain a source of potential volatility in this week’s crude oil balance.
“Due to implicit domestic supply (production + adjustment + transfers), we expect an increase (+0.5 million barrels per day) after last week’s weak numbers,” the strategists explained in the report.
“To complete the picture, we expect a similar increase in SPR inventories (+0.7 million barrels) over the course of the week,” they added.
The strategists also noted in the report that their expectations regarding the products had “shifted somewhat” compared to their original assessment.
“We expect declines in gasoline (-2.1 million barrels) and distillate (-1.0 million barrels) and an increase in jet (+1.5 million barrels). We model implied demand for these three products at ~14.6 million barrels per day for the week ending August 9,” they added.
According to the EIA’s latest Weekly Petroleum Status Report, U.S. commercial crude oil inventories (excluding stocks in the Strategic Oil Reserve (SPR)) fell by 3.7 million barrels between the week ended July 26 and the week ended August 2.
Crude oil stocks excluding SPR were 429.3 million barrels on August 2, 433.0 million barrels on July 26 and 445.6 million barrels on August 4, 2023, the report showed. Crude oil stocks in the SPR were 375.8 million barrels on August 2, 375.1 million barrels on July 26 and 347.8 million barrels on August 4, 2023, the report showed.
Total U.S. petroleum inventories — including crude oil, motor gasoline, fuel ethanol, kerosene, distillate heating oil, residual heating oil, propane/propylene and other oils — stood at 1.666 billion barrels as of August 2, the report showed. That figure rose by 1.9 million barrels week-over-week and by 45.1 million barrels year-over-year, the report highlighted.
In an earlier oil and gas report sent to Rigzone by the Macquarie team following the release of the EIA report, Macquarie strategists highlighted that the EIA reported “declines in commercial crude (-3.7 million barrels) and Jetstream (-1.1 million barrels), and increases in Cushing (+0.6 million barrels), gasoline (+1.3 million barrels) and distillate (+0.9 million barrels).”
“This is contrary to our expectations for small gains in crude oil and jet stream and a healthy decline in gasoline and distillate inventories, which will be slightly lower,” they added.
“At a high level, net oil basis (crude oil + products), reported inventory changes were relatively close to our expectations, albeit with a significantly different composition,” the strategists said in the report, noting that “weak implied supply drove relative strength in crude oil, offset by weak implied demand, which contributed to relative weakness in products.”
The strategists also stated that the crude oil balance “came close to our expectations, but net imports were slightly above expectations (+0.1 million barrels per day).”
“Implied domestic supplies (prod.+adj.+trans.) recorded a weak 13.4 million barrels per day, with the average over the last four weeks falling to 13.4 million barrels per day in nominal terms; these figures appear slightly higher when adjusted for third-party estimated flows, but still appear disappointing at present,” they added.
The strategists also highlighted in the report that on the product side, “implied demand fell short of our expectations… for gasoline+distillate+jet at 14.4 million barrels per day (vs. estimated ~14.8 million barrels per day), with the average over the last four weeks being 14.5 million barrels per day, compared to 14.5 million barrels per day in the same four weeks last year.”
“Similarly, the total contraction (implied demand + exports) for these three products fell short of our expectations at 17.0 million barrels per day (we had expected about 17.4 million barrels per day), with the average over the last four weeks being 17.0 million barrels per day, compared to 17.0 million barrels per day in the same four weeks last year,” they added.
“Meanwhile, crude oil production declined slightly (-0.1 million barrels per day) over the same period last year,” they continued.
In that report, Macquarie strategists outlined that they see “potential for a modest commercial build in US crude (+3.3 million barrels) in the EIA’s next weekly petroleum status report, with… slightly increasing volumes (+0.1 million barrels per day), a recovery in nominal implied supply (+0.5 million barrels per day), higher net imports (nominal +0.6 million barrels per day), and a slightly stronger week-over-week increase in SPR inventories (+0.8 million barrels).”
“On net import numbers, we are currently modelling a sharp decline in exports (-0.9 million barrels per day) and a moderate decline in imports (-0.3 million barrels per day) week-on-week. Given the incompleteness of this week’s data, we see potential for volatility in these numbers,” they added in the report.
“In terms of products, our preliminary expectations again point to a sharp decline in gasoline (-3.7 million barrels), almost stagnant in distillates (+0.1 million barrels) and an increase in kerosene (+1.6 million barrels).
In an oil and gas report sent to Rigzone by the Macquarie team ahead of the release of the latest EIA report, Macquarie strategists revealed that they forecast a 0.6 million barrel increase in US crude oil inventories for the week ending August 2.
The EIA’s next weekly petroleum status report is scheduled to be released on August 14 and will include data for the week ending August 9.
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