Conclusion: Very bullish stats. We are three weeks into July and already drew 23.5mb, 36mb more than normal.
We continue to expect larger draws in the remainder of 2H17
- Total petroleum stocks drew 9.5mb,13.3mb more than normal and 5.9mb more than expected.
- Largest draws in crude (6mb more than normal), mogas and distillates
- Implied demand (products supplied) shot up to extremely high levels this week, which again we dismiss. But the 4wk average is now at record highs as well. We think there is a data issue there. Either EIA overestimates production or net imports…
- …but net imports are already 1.5mb/d below last years levels
- Refinery utilization increased 0.3% to 94.3%, crude and gross inputs are near all-time highs
- Crude output down 19kb/d, but that is mainly due to Alaska. L48 output is up. On net, output is up 0.92mb/d year-over-year, but as we have highlighted last week
- A large part of this is due to a base effect given the sharp drop-off in output at this time of the year in 2016. Output recovered in late 2016, hence this base effect will ease off a bit in 4Q17
- The second thing to keep in mind is that the weekly data for 2H16 has been revised sharply higher in the monthly data by over 160kb/d. The month of July has been revised up even more, 207kb/d. The monthly data has been much closer in line with the weekly data in the first four months of 2017. Hence, if the weekly data reported in June and July is correct, the year-over-year growth in July was likely closer to 600kb/d (as opposed to 700kb/d) and as of now it’s likely closer to 750kb/d (as opposed to 970kb/d)
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