Conclusion: Neutral to slightly bullish. Draws are larger than normal but drawdowns have slowed down materially over the past two week compared to the first 3 weeks of July
- Total petroleum stocks drew 4.6mb, 3.3mb more than normal but 1.1mb more than expected
- Crude saw the largest draw (6.5mb, 4.5mb more than normal) but this was to a large extent offset by a 3.4mb build in mogas (5.4mb more than normal)
- Implied demand is again up 1.3mb week-over-week, 4 week average demand remains very strong
- Net imports were up 0.5mb/d w-o-w, bringing it to -0.8mb/d year-over-year, a bit higher than in previous months
- Refinery runs up 0.9% at 96.3%, crude and gross input remain in record territory
- Net imports increased week-over week but are still down 1.2mb/d year-over-year
- Refinery utilization increased 1.1% to 95.4%, 4 week average of crude and gross inputs are at all-time highs
- Crude output down 7kb/d but L48 actually up. Crude output remains around +1mb/d year-over year. Below we quickly reiterate why we think the production growth numbers give a wrong picture Inflated production numbers in the weekly data: There are two effects at work: (1) production likely continued to be overstated in June and July 2017 and (2) growth rates are even more overstated because production in June and July 2016 was underreported in the weekly data. If we assume that production remained overstated by 150kb/d in the weekly data for June/July 17 and taking the base effect from the underreported production in 2016 into account, y-o-y growth rates for June and July 2017 were more in the order of 470kb/d and 590kb/d, respectively (compared to 690kb/d and 930kb/d at face value from weekly data)
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