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In an oil and gas report sent to Rigzone late Monday, Macquarie strategists revealed that they are forecasting that U.S. crude inventories will be up 6.6 million barrels for the week ending November 24.
“This compares to an 8.7 million barrel build for the week ending November 17, with the total U.S. crude balance again realizing looser than we had anticipated,” the strategists noted in the report.
“Crude balances have realized much looser than our expectations across the previous three weeks, with lagging refining runs and extremely strong implied supply contributing. Again, given the surprisingly large crude builds recently, we see some potential for continued volatility in this week’s stats,” they added.
“Moving to this week, our balances point to yet another large U.S. crude build, despite our expectation for increasing crude runs (+0.5 million barrels per day), following a soft print last week,” the strategists continued.
“Given the extent of recent underperformance in crude runs relative to our estimate of refining outages, a catch-up here could drive a tighter than expected balance,” they went on to state.
In the report, the strategists said that, among net imports, they “again look for a large week on week increase, with exports nominally much lower (-1.1 million barrels per day) and imports higher (+0.2 million barrels per day)”.
“From implied domestic supply (production +adjustment +transfers), we look for a week on week reduction (-1.1 million barrels per day) following another very strong nominal print last week,” the strategists stated in the report.
“Rounding out the picture, we anticipate a small increase (+0.3 million barrel) in Strategic Petroleum Reserve inventory on the week,” they added.
The strategists also noted in the report that, at Cushing, their refinery/pipeline model is calling for a build of 0.6 million barrels this week.
“Among products, we look for a moderate build in distillate (+2.1 million barrels), largely offset by draws in gasoline (-1.6 million barrels) and jet stocks (-0.3 million barrels),” they added.
“Amidst holiday effects, we model implied demand for these three products at ~14.1 million barrels per day for the week ending November 24,” they continued.
In its latest weekly petroleum status report, which was published on November 22, the U.S. Energy Information Administration (EIA) revealed that U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, increased by 8.7 million barrels from the week ending November 10 to the week ending November 17.
Crude oil stocks in the country, not including the Strategic Petroleum, stood at 448.1 million barrels on November 17, the report highlighted. Crude oil in the Strategic Petroleum Reserve stood at 351.3 million barrels on November 17, it showed.
Total petroleum stocks in the U.S. – including crude oil, total motor gasoline, fuel ethanol, kerosene type jet fuel, distillate fuel oil, residual fuel oil, propane/propylene, and other oils – came in at 1.619 billion barrels on November 17, the report highlighted. This figure was up 4.5 million barrels week on week and up 8.8 million barrels year on year, the report outlined.
In a report sent to Rigzone prior to the release of the EIA’s latest weekly petroleum status report, Macquarie strategists revealed that they were forecasting that U.S. crude inventories would be up 4.8 million barrels for the week ending November 17.
“This compares to a 3.6 million barrel build for the week ending November 10, with the total U.S. crude balance realizing looser than we had anticipated,” the strategists said in that report.
“Those figures were delivered alongside stats for the week ending November 3, which greatly diverged from our expectations, with a much looser crude balance and much tighter products balance than we had anticipated,” they added.
“Of course, the surprisingly large crude build across these two weeks could inject further uncertainty/volatility into this week’s stats, potentially swinging the pendulum back towards a tighter than expected balance, in theory,” the strategists continued.
The EIA’s next weekly petroleum status report is currently scheduled to be released on November 29.
To contact the author, email andreas.exarheas@rigzone.com
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