Conclusion: Very bullish stats. Two weeks of solid draws in July paint a very bullish picture despite the apparent strong supply growth data. We continue to expect large global draws in 2H17 which will lead to stronger timespreads and spot prices
- Total petroleum stocks drew 10.2mb, 12.7mb more than normal and 8.6mb more than expected.
- All products except propane drew this week, both outright an vs. seasonal
- Implied demand (products supplied) shot back up this week, but as we have highlighted before, the weekly swings should be ignored. 4wk average demand is now comfortably above last years levels
- Net imports continue to languish around 1mb/d below last years levels
- Refinery utilization dropped 0.5% again to 94%, but crude and gross inputs remain near all-time highs
- Crude output was again up 32kb/d, close to 1mb/d above last years levels. However, there are two things to take into account.
- 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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