Conclusion: This weeks stats need some more explanation. We have an overall tight situation for PADD2 in the US with Keystone out until the end of the month, Cushing drawing and reports of extremely low inventories at selected refineries in the midcontinent. WTI thus flipped into backwardation, which makes it all the more perplexing why the WTI-BRT arb is still as wide. The US is still exporting crude oil near record levels. Yet US inventories overall have not been drawing much relative to seasonal. Plus, with so much Us crude hitting export markets, Brent has remained stubbornly strong. We expect the WTI-BRT arb to narrow substantially from here, but are worried that the Brent market is prone for a correction in the near term.
• Total draw of 1.8mb vs 2.1mb seasonal. Crude drew 1.9mb vs 1.4mb build, but distillates built 0.3mb vs -2mb seasonal draw. Overall, draw roughly in line with consensus forecast.
• Implied demand down 0.5mb/d , 4 week average in line with last years levels
• Total net imports down 1mb/d again, languishing near record lows as imports are line with last year but export still at record levels
• Refinery runs up 3%, net and gross inputs at seasonally record levels
• Increased by a further 1.5% this week to 89.6%, which is seasonally very high. Both crude and gross inputs are at seasonally record levels
• Production increased 13kb/d this week, up 1mb/d year-over-year
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