US DATA: API reports 3.2 ml/b draw in crude stocks, gasoline lower

Quantum Commodity Intelligence – US crude oil inventories posted an unexpected draw for the week ending 10 May, while gasoline stockpiles also eased, according to a report released late Tuesday by the industry-backed American Petroleum Institute (API).

The latest API data showed crude inventories dropped by 3.1 million barrels, against forecasts for a build of around 1 million barrels.

The key Cushing storage hub, the delivery point for the NYMEX WTI futures contract, was also lower, going against the broader trend for higher stocks at the Oklahoma hub over the previous three months.

Cushing stocks at the start of May reached a 10-month high of 35.3 million barrels, having dipped to a low of 28 million barrels in late January before rebounding.

The Strategic Petroleum Reserve added another 600,000 barrels as the low-scale buyback program continued after the Department of Energy released 180 million barrels from the SPR in 2022.

Restocking has generally been limited to around 3 million barrels per month after the DoE said logistics would limit throughputs. This figure is expected to continue over the summer based on oil already purchased, while the Department of Energy has issued a further tender for October crude.

Meanwhile, gasoline inventories retreated 1.27 million barrels last week, while distillates posted a modest increase of 349,000 barrels for an overall net oil draw of just over 4 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 pegged at $25/b based on Jun24 futures contracts early Wednesday, down from around $27/b at the same stage last week, with products retreating at a faster rate than crude this month.

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.