Counter-seasonal US crude oil inventory builds likely extended in the week ended Dec. 16, analysts surveyed by S&P Global Commodity Insights said Dec. 19, amid an expected continued slide in refinery demand.
Total US crude stocks likely climbed 600,000 barrels to around 424.7 million barrels, analysts said. Over the last five years, inventories have seen an average 3.5 million-barrel draw over the period. The counter-seasonal build would leave stocks around 5.3% behind the five-year average of US Energy Information Administration data, in from 6.2% the week prior.
The build comes amid an expected continued slide in refinery demand. Total net crude inputs are forecast by S&P Global to average 12.09 million b/d, down 40,000 b/d on the week and a six-week low.
Total refinery utilization is expected by analysts to have climbed 1.2 percentage points to 93.4% of capacity. A sharp decline in utilization during the week prior means the expected bump would still leave refinery runs well below their early December peak of 95.5%.
Refined product demand has been steadily declining in recent weeks, with EIA reporting total product supplied more than 6% below the five-year average during the week ended Dec. 9.
Demand for transportation fuels has been especially weak in recent weeks. Implied gasoline demand was more than 8% below normal in the week to Dec. 9, while distillate consumption was almost 14% below normal over the same period.
Gasoline inventories are expected to have climbed 1.6 million barrels in the week to Dec. 16, analysts said, while distillate stocks are expected 400,000 barrels lower at around 119.8 million barrels.
Export demand
The crude build was likely blunted by continued strong exports supported by healthy arbitrage economics for flows to both Europe and Asia.
Data from Platts cFlow ship and commodity tracking software from S&P Global Commodity Insights shows US crude exports averaged 4.44 million b/d in the week to Dec. 16, up from an EIA-reported 4.32 million b/d the week prior. At that level, the four-week moving average of exports would edge up to a fresh record high of 4.28 million b/d.
The arbitrage incentive for moving US WTI MEH into Rotterdam versus North Sea Forties has averaged $/b to date in December, up from $/b in November, S&P Global data shows. The incentive for moving WTI MEH into Singapore versus Malaysian Tapis crude has widened to $/b this month from $/b the month prior.
