EIA DATA: Diesel resumes stock build as demand tumbles 7%
Quantum Commodity Intelligence – US stocks of distillate fuels increased during the second week of November as demand tumbled 7%, while net export flows slowed even though production levels fell, weekly data from the EIA showed on Wednesday.
Inventories rose by 1.1 million barrels – its sharpest weekly rise since mid-September – to a seven-week high of 107.4 million in the week to November 11, versus market expectations of another draw of around 0.5m barrels.
Stocks have now increased during four of the five past weeks, yet they remain near their lowest on record ahead of the winter period and are down over 8 million barrels versus the same week in 2009.
The NY Harbor USLD futures were down 1% on the day at $3.61/gal, even as ICE LSGO futures in Europe firmer, pressuring the HO-GO transatlantic distillate spread.
Stocks rose last week as deliveries of distillate fuels tumbled by nearly 300,000 bpd on the week to 3.86 million bpd, a two-month low and a steep 11% under the same week in 2019.
US deliveries in mid-November – when demand tends to ramp up during the heating season – were at their lowest since 2017, EIA data showed.
The sharp fall comes a day after the Paris-based IEA said it expects diesel demand to fall in 2023 due to high prices and a looming recession.
Stocks were further boosted as US exports of distillates slowed by 263,000 bpd on the week to 1.18 million bpd, lowering the net outflow of distillate to 1.07 million bpd.
However, diesel production slowed to 5.1 million bpd, after the prior's peak, but remains flat to 2019 levels and up 5% on the year.
Jet
Jet fuel inventories also built to a two-month high, rising by 0.3 million barrels to 37.3 million barrels, but remained 2.3 million barrels below the same week in 2019.
Stocks fell even as production levels were more or less static at 1.62 million bpd, while demand ramped up to a one-month high of 1.65 million bpd ahead of the Thanksgiving holiday later this month.
Net exports of jet fuel also picked up with some 74,000 barrels flowing out of the US each day during the week.