ANALYSIS: Oil product stocks shrink as exports hit record, demand rises

Quantum Commodity Intelligence - US oil products stocks maintained the downward trend again last week as domestic deliveries heated up ahead of the July 4 weekend, while oil product exports hit their highest level on record, weekly EIA data showed.

After recovering over 13 million barrels during the second half of June, US product stocks fell over 3 million barrels in the week to July 1 to 762 million barrels, down 7.5% to the 2015-2019 average.

The weekly fall mostly hit gasoline stocks which were down by 2.5 million barrels to 219 million, unwinding most of their prior week gains, and down 6% from more normal levels.

Stocks of middle distillates also fell with jet down to a six-week low of 39.9 million, while distillate fuel stocks reversed some of last week's gains to stand at 111.1 million, 20% below the historic average.

Crude stocks were mixed as SPR inventories fell by nearly 6 million barrels on the week to 492 million, their lowest since December 1985, while commercial stocks rebounded by 8 million to a two-month high of 423.8 million barrels.

That left total US petroleum stocks mostly unchanged on the week, but down 14% to their historic average for early July.

Heated demand

After three sluggish weeks, US domestic product deliveries jumped by nearly 500,000 bpd on the week to a four-month high of 20.5 million bpd.

It means that US demand is 2% ahead of the 2015-2019 average, the first time to overtake pre-Covid levels since late May.

The growth came from road fuels and jet ahead of the July 4 Independence weekend, during which motoring agency AA expected a record number of Americans to hit the road.

Gasoline demand rose by nearly 500,000 bpd on the week to 9.4 million bpd, its highest since the Christmas peak, but down over 600,000 bpd from year-ago levels.

Jet rose to 1.8 million bpd, overtaking pre-Covid levels and its highest since Christmas 2019, while distillate deliveries rose to a four-month high of 4.4 million bpd.

Those gains were offset by weaker demand for residual fuels which fell to 170,000 bpd, while propane demand halved on the week to 590,000 bpd.

Trade

Stocks were further drained as product exports jumped by 850,000 bpd to a record high of just under 7 million bpd, beating the previous record of 6.8 million set in April.

US product exports are up 1.5 million bpd compared to pre-Covid levels.

At the same time, product imports slowed, leaving the net outflow at 4.8 million bpd, up 1 million bpd on the week.

Crude trade was more favourable to US stocks with imports rising to a one-month of 6.8 million bpd, while exports slowed to 2.6 million bpd, boosting commercial inventories

Refining

US crude throughput slid back below 17 million bpd, but in line with the four-week rolling average and 300,000 bpd ahead of year-ago levels.

The marginal slowdown took utilization rates down to 94.5%, with refineries in the Gulf easing back from their 30-year high to 97.6%, while the East Coast ramped up to 99.2%.

Gasoline output was marginally higher at 9.9 million bpd, with the largest gain in distillates which reached 5.4 million bpd, 3% ahead of the pre-Covid average.

Week ending 01 July 2022

Key stock figures (million barrels)

Commercial crude and product stocks: 1678 m barrels, -0.7 m barrels on week.

Commercial crude stocks: 424 m barrels, +8.2 m barrels on week.

Strategic crude stocks: 492 m barrels, -5.8 m barrels on week.

Gasoline stocks: 219 m barrels, -2.5 m barrels on week.

Middle distillate stocks: 111 m barrels, -1.3 m barrels on week.

Jet stocks: 40 m barrels, -1.5 m barrels on week.

Diesel stocks: 100 m barrels, -1.6 m barrels on week.

Residual fuel stocks: 28 m barrels, +0.1 m barrels on week.

Propane/propylene stocks: 55 m barrels, +0.9 m barrels on week.

Ethanol stocks: 23 m barrels, +0.7 m barrels on week.

Key demand figures (million barrels per day)

Total oil products: 20.5 million bpd, +0.47 million bpd on week.

Gasoline: 9.4 million bpd, +0.49 million bpd on week.

Jet: 1.8 million bpd, +0.32 million bpd on week.

Middle distillates: 4.4 million bpd, +0.81 million bpd on week.

Residual fuels: 0.2 million bpd, -0.37 million bpd on week.

Propane/propylene: 0.6 million bpd, -0.53 million bpd on week.

Key production and trade figures (million barrels per day)

Crude production: 12.1 million bpd, 0.0 million bpd on week.

Crude imports: 6.8 million bpd, +0.84 million bpd on week.

Crude exports: 2.6 million bpd, -0.77 million bpd on week.

Product imports: 2.2 million bpd, -0.18 million bpd on week.

Product exports: 7.0 million bpd, +0.85 million bpd on week.

Key refining figures (million barrels per day)

Net crude input into refineries: 16.4 million bpd, -0.23 million bpd on week.

Utilisation: 94.5%, -0.5% point on week.

Finished gasoline output: 9.9 million bpd, +0.02 million bpd on week.

Jet output: 1.7 million bpd, +0.04 million bpd on week.

Middle distillates output: 5.4 million bpd, +0.24 million bpd on week.

Diesel output: 5.1 million bpd, +0.17 million bpd on week.

Fuel oil output: 0.2 million bpd, 0.0 million bpd on week.