In an oil and gas report sent to Rigzone by the Macquarie team late Thursday, the company’s strategists revealed that they “see potential for a commercial expansion of US crude oil supplies” in next week’s US Energy Information Administration (EIA) weekly petroleum status report.
“Looking ahead to next week’s release, we see potential for a commercial build in US crude (+3.8 million barrels), with slight declines (-0.1 million barrels per day), a recovery in nominal implied supply (+0.5 million barrels per day), an increase in net imports (+0.6 million barrels per day nominal) and a slightly stronger build in SPR inventories (+0.9 million barrels) over the week,” the strategists noted in the report.
“Within these balances, we expect a relatively low export figure of around 3.6 million barrels per day per week,” they added.
“Given the incompleteness of this week’s data, we note that these figures may be subject to fluctuations. On the products side, our preliminary expectations point to declines in gasoline (-3.1 million barrels) and distillate (-1.2 million barrels), while jet fuel (+0.7 million barrels) is set to continue to rise,” it said.
In the report, Macquarie strategists highlighted that the EIA’s latest weekly petroleum status report, released this week, reported “declines in commercial crude (-4.6 million barrels), Cushing (-0.6 million barrels), gasoline (-1.6 million barrels) and distillate (-3.3 million barrels), with an increase in Jetstream (+0.6 million barrels).”
“Overall, crude oil prices were slightly lower than expected, while commodity prices were significantly lower than expected,” the strategists added.
The strategists noted in the report that “crude oil deliveries were slightly above expectations (+0.1 million barrels per day) and net imports were significantly higher than expected in nominal terms (+0.7 million barrels per day).”
“Implied domestic supply (production + adjustment + transportation) was nominally weak at 13.5 million barrels per day (we modeled ~14.0 million barrels per day), with the average over the past four weeks being 13.7 million barrels per day in nominal terms; the latter appears significantly higher when adjusted for third-party estimated water flows,” the strategists explained.
Macquarie strategists highlighted in the report that implied demand within products this week was slightly above their expectations, “at 14.5 million barrels per day for gasoline+distillate+jet (versus an estimated ~14.4 million barrels per day), with the average over the past four weeks being 14.4 million barrels per day, versus 14.4 million barrels per day in the same four weeks last year.”
“Total consumption (implied demand + exports) of these three products was 17.4 million barrels per day, well above our expectations (we had expected about 16.9 million barrels per day), with the average over the last four weeks being 17.0 million barrels per day, compared to 16.7 million barrels per day in the same four weeks last year,” they added.
“Meanwhile, crude oil production declined slightly (-0.2 million barrels per day) over the same period last year,” they continued.
Crude oil inventories, excluding the SPR, stood at 426.0 million barrels on August 16, 430.7 million barrels on August 9, and 433.5 million barrels on August 18, 2023, according to the EIA’s latest Weekly Petroleum Status Report.
Total petroleum inventories – including crude oil, motor gasoline, fuel ethanol, kerosene, distillate heating oil, residual heating oil, propane/propylene and other oils – stood at 1.658 billion barrels on August 16, the report said. That figure fell by 5.2 million barrels week-on-week and rose by 46.7 million barrels year-on-year, the report said.
The EIA’s next weekly oil status report is scheduled for release on August 28. It will include data for the week ending August 23.
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