Macquarie strategists projected that U.S. crude inventories will be down 9.3 million barrels for the week ending July 28 in a new report sent to Rigzone on Monday.
“This follows a 0.6 million barrel draw for the week ending July 21, with the total U.S. crude balance realizing much looser than our expectations and exhibiting extremely strong implied supply,” the strategists said in the report.
“While crude balances have been realizing softer than our expectations MTD, we believe last week’s particularly disappointing draw can conceivably be attributed to inherent noise in the data,” the strategists added.
“Should that phenomenon repeat itself this week, however, we would view the outcome as quite bearish,” they warned.
Looking at this week’s balance, the strategists outlined in the report that, from refineries, they were “again” looking for “a minor increase in crude runs”.
“Among net imports, we look for a small nominal reduction, with exports up modestly on a nominal basis (+0.3 MBD) and imports also higher (+0.2 MBD),” the strategists said in the report.
“From implied domestic supply (prod + adj.), we look for a sharp reduction (-1.1 MBD) following last week’s high print. Rounding out the picture, we anticipate no change in SPR inventory on the week,” they added.
“Finally, we note last week’s surprisingly soft crude balance could add volatility to this week’s numbers,” they continued.
In the report, the strategists revealed that, at Cushing, their refinery/pipeline model is calling for a draw of 1.5 million barrels this week.
“Among products, we look for a gasoline draw (-0.4 million barrels), distillate build (+1.3 million barrels), and jet stocks up slightly (+0.1 million barrels),” they said in the report.
“We model implied demand for these three products at ~14.4 MBD compared to 14.5 MBD last week and a trailing four-week avg. of 14.2 MBD,” they went on to state.
In a separate report sent to Rigzone on July 24, strategists at Macquarie projected that U.S. crude inventories would be down 7.1 million barrels for the week ending July 21.
“For this week, from refineries, we look for a minor increase in crude runs,” the strategists stated in that report.
“We again look for a large reduction in net imports, with exports up moderately on a nominal basis (+0.4 MBD) and imports significantly lower (-0.7 MBD). From implied domestic supply (prod + adj.), we look for a modest w/w increase (+0.3 MBD),” they added.
“Rounding out the picture, we anticipate no change in SPR inventory on the week,” the strategists went on to state in that report.
The U.S. Energy Information Administration’s (EIA) latest weekly petroleum status report, which was released on July 26, noted that U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, decreased by 0.6 million barrels from the previous week.
“At 456.8 million barrels, U.S. crude oil inventories are approximately two percent above the five year average for this time of year,” the EIA report stated.
U.S. crude oil inventories, excluding those in the SPR, came in at 457.4 million barrels on July 14 and 422.1 million barrels on July 22, 2022, the latest EIA report revealed. Crude oil in the SPR was 346.8 million barrels on July 21 and July 14, and 474.5 million barrels on July 22, 2022, the latest EIA report outlined.
The EIA’s next weekly petroleum status report is scheduled to be released on August 2, according to the EIA’s website, which describes the report as “the petroleum supply situation in the context of historical information and selected prices”.
To contact the author, email andreas.exarheas@rigzone.com
