US DATA: Steep build in US crude stocks offset by refined products - API

Quantum Commodity Intelligence – US crude oil stocks posted a much higher-than-expected build for the week ending 9 February, although steep draws in refined products more than offset the crude increase, according to data released late Tuesday by the American Petroleum Institute.

The latest API numbers revealed an 8.52 million barrel increase in crude inventories, coming in way above expectations for a build of around 2.5 million barrel build, while Cushing posted a second weekly increase.

The key Cushing storage hub, the delivery point for the NYMEX WTI futures contract, was up 512,000 barrels, taking the two-week build to around 1 million barrels. Inventories at Cushing had tumbled during January, which saw stocks drop from around 35 million barrels at the start of the year to the 28-million-barrel mark before recovering slightly.

The Strategic Petroleum Reserve added 800,000 barrels as the low-scale buyback program continued after the Department of Energy released 180 million barrels from the SPR in 2022, with restocking limited to around 3 million barrels per month after the DOE said logistics will limit throughputs.

Meanwhile, gasoline inventories tumbled 7.23 million barrels, while distillates dropped by 4.016 million barrels for an overall net draw of 2.726 million barrels.

The 3-2-1 crack spread, a measure of US refining profitability against gasoline and heating oil margins, had surged to around $36/b based on Mar24 futures contracts early Wednesday, up from around $27/b this time last week as refined product cracks firmed amid ongoing refining disruptions.

BP is unlikely to reopen its 440,000 bpd Whiting refinery in the Midwest before the end of the month after a power outage on 1 February, while TotalEnegeries was forced to shut its 240,000 bpd Port Arthur plant just a few days after restarting from a power outage of its own.

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.