API DATA: Crude stocks higher despite further Cushing drawdown
Quantum Commodity Intelligence – US crude oil inventories posted a steeper-than-expected build for the week ending 13 September, while product stockpiles also increased, according to a report released late Tuesday.
Latest data from the industry-backed American Petroleum Institute (API) showed a crude build of 1.96 million barrels, going against the pre-release forecast for a modest drop of around 100,000 barrels.
The higher figure bucked the broader summer trend, with the API calculating a combined drawdown of over 35 million barrels during July and August, which included just two small weekly gains during that period.
However, the key Cushing storage hub, the delivery point for the NYMEX WTI futures contract, tumbled another 1.4 million barrels as inventories at the Oklahoma hub dipped below the 23 million barrel mark.
Cushing stockpiles were drained to a nine-year low of 21 million barrels last year, which at the time analysts warned was close to the minimum operational levels needed to keep volumes flowing efficiently and maintain the quality of WTI.
The Strategic Petroleum Reserve added 600,000 barrels as the buyback program continued after the Department of Energy released 180 million barrels from the SPR in 2022, while another buy tender for 2025 barrels is expected this week.
Products
Meanwhile, gasoline inventories posted a build of 2.34 million barrels last week. Distillates registered a build of 2.3 million barrels for an across-the-barrel net build of 6.6 million barrels, according to API calculations.
The 3-2-1 crack spread, a measure of US refining profitability against gasoline and heating oil margins, was again hovering at around yearly lows, although refined products largely kept pace with the WTI crude rebound.
Based on Nov24 contracts, the 3-2-1 crack was valued at around $15.30/b early Wednesday versus the $15.55/b at the same stage last week.
The weekly API report serves as a forerunner to the closely watched Energy Information Administration Weekly Petroleum Status Report, which will be published later Wednesday.
