Conclusion: At first sight the stats look very bullish, with total stocks drawing >11mb more than normal. However, 7mb of that is due to production shut ins alone, which will likely be reversed next week. Record high exports helped to draw stocks further. While that is neutral on a global level, it does help to accelerate the US draws. We believe over the medium term, the gap between WTI and Brent will have to narrow significantly. In addition, the cleanup in global inventories continues.
- Very large crude draw of 5.7mb vs -3.9mb expected (and 11.4mb more than seasonal). This pushed down total stocks - 9.4mb, 8.7mb more than normal. However, the large crude draw came amidst a sharp decline in output by over 1mb/d as a result of the storm in the US GoM.
- Demand dropped 0.6mb/d last week to a seasonally very low 19.1mb/d, but the 4wk average is still at last years levels
- Total exports were up 0.9mb/d, mainly as crude exports shot up sharply to all time highs. Thi sis in our view the result of the massive WTI-Brent spread that is still present.
- Total imports remained flat week-over-week and roughly in line with last years imports
- Total Net imports dropped 0.9mb/d to extremely low 2.9mb/d
- Refinery utilization dropped 4.7% week-over-week to 84.5% as refineries shut down ahead of the storm
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