US DATA: API sees 5 million bbl drop in crude stocks, gasoline up
Quantum Commodity Intelligence – US crude oil stocks posted a fifth drop in the last six weeks for the week ending 15 September, according to a report released late Tuesday by the American Petroleum Institute.
The latest API numbers revealed a 5.25-million-barrel drop against analysts' expectations for a smaller draw of 2.5-3 million barrels, while the key Cushing storage hub, the delivery point for the WTI crude futures contract, fell by around 2.5 million for a second week.
The Strategic Petroleum Reserve added 600,000 barrels as the low-scale buyback program continued after the Department of Energy released 180 million barrels from the SPR in 2022, but the recent surge in prices is expected to keep any further SPR purchases at minimal levels.
Gasoline increased by 730,000 barrels last week, while distillate stocks eased by around 250,000 barrels.
The weekly API report serves as a forerunner to the closely watched Energy Information Administration Weekly Petroleum Status Report, which will be published later on Wednesday.
Meanwhile, the 3-2-1 crack spread, a measure of US refining profitability based on gasoline and heating oil margins, dipped below $30/b based on Nov23 futures contracts.
This compares to the same stage last week when Oct23 NYMEX contracts were at $34/b as products failed to keep pace with the crude rally, although relatively firm distillate cracks were again compensating for softer gasoline cracks.
Latest figures from the EIA put US crude at 12.9 million bpd in the first week of September, the highest since early 2020, with a split of 12.5 million bpd in the lower 48 states and 420,000 bpd in Alaska.
However, in a separate report, the EIA said US shale crude production is forecast to drop for the third straight month in October, led by a fall in the Permian basin.
Output from its seven major shale basins is seen down 40,000 bpd from September to 9.39 million bpd, putting monthly shale production at its lowest since May but still higher than 9.095 million bpd in October 2022.
