US EIA data for the week to 31 May recorded significantly more bullish inventory numbers than the market had been expecting (notably a 6.3mmbbl draw in crude inventory), although API data released the day before had already pointed towards a strong stockdraw. While total US inventory trended lower WoW for the first time in six weeks, it remains above the top of the five-year range. Crude inventory is still high, above the top of its seasonal range, gasoline inventory is trending the top end of the range and distillate inventory continues to rise toward the average.
The fall in crude inventory was down to a sharp fall in crude imports and a strong pickup in refinery crude throughput in the week. Crude imports dropped 0.5mmb/d (-7.0%) WoW to 7.3mmb/d, the lowest YTD, with deliveries to the Gulf Coast PADD 3 region particularly curtailed. Refinery crude throughput recovered from last week’s slump, rising 0.4mmb/d (+2.9%) WoW to 15.5mmb/d, at the top of the seasonal range. Refinery utilisation was up 2.0% to 88.4%, in contrast to the 0.3% increase anticipated by the market.
There was a counter-seasonal 0.5mmb/d (2.7%) WoW rise in implied all-product demand to 18.8mmb/d, more or less reversing the previous week’s fall in demand. Demand increased in the volatile residual fuel oil and ‘other oil products’ categories, each up 0.3mmb/d WoW. Demand for gasoline was 0.1mmb/d lower WoW but that was shallower than the seasonal trend. Gasoline demand remains at elevated levels relative to the YTD, though only at the bottom end of the seasonal range, with the driving season having kicked off. The cumulative average demand on a 52-week basis for all-products rose to 0.2% YoY, from flat YoY in the previous week.