US crude oil stocks increased by 3.1 MMBbl. Gasoline and distillate inventories decreased 0.2 MMBbl and 2.4 MMBbl, respectively. Yesterday afternoon, API reported a crude oil draw of 5.9 MMBbl, alongside a gasoline build of 2.1 MMBbl and a distillate draw of 1.7 MMBbl. Analysts, to the contrary, were expecting a crude oil build of 1.6 MMBbl. Total petroleum inventories posted a decrease of 0.9 MMBbl.
US crude oil production decreased 100 MBbl/d last week, per the EIA’s estimates. Crude oil imports were down 87 MBbl/d last week, to an average of 6.3 MMBbl/d. Refinery inputs averaged 16 MMBbl/d (0.5 MMBbl/d less than last week’s average), leading to a utilization rate of 86.4%. Weakness in prices continued with the crude oil stocks build as well as Cushing crude stocks coming in higher than expected (a draw of only 0.2 MMBbl). Prompt-month WTI was trading down $0.95/Bbl, at $52.67/Bbl, at the time of writing.
Flat price has continued its downward slide this week with the announced resumption of Saudi crude production following last month’s drone and missile attack against key oil installations in the kingdom. Adding further to the bearish sentiment was last Friday’s announcement of a partial ceasefire with Houthi rebels in Yemen. With geopolitical risks to supply diminished, market participants have turned their attention back to global macroeconomic woes (namely those caused by the ongoing US-China trade war and the potential for that conflict to extend to capital flows with new measures proposed by the Trump Administration). Amid the weakening outlook for demand and ample supply, some of the bullishness in Brent time spreads has also diminished.