Crude to remain under pressure as exports are falling, however, strong gasoline demand likely limits downside.
Inventories
Crude, 411 mln bbls, up 5.8 mln bbls. Down 16.2% y-o-y
Gasoline, 235.8 mln bbls, down 3.2 mln bbls. up 2.0% y-o-y
Distillate, 121.3 mln bbls, down 0.4 mln bbls. Down 19.9% y-o-y.
Demand
Refiner inputs, 17.239 mbd, down 413k bpd. 4-week avg, 17.59 mbd, up 2.9% y-o-y.
Gasoline, 9.707 mbd, up 433k bpd. 4-week avg, 9.646 mbd, down 0.1% y-o-y.
Distillate, 4.141 mbd, up 336k bpd. 4- week avg, 3.921 mbd, down 5.2% y-o-y.
Production
Gasoline, 10.035 mbd, down 133k bpd. 4-week avg, 10.188 mbd, up 0.2% y-o-y.
Distillate, 5.174 mbd, down 268 mbd. 4-week avg, 5.369 mbd, up 4% y-o-y.
Crude oil imports, 9.066 mbd, up 1.635 mbd. 4-week avg, 8.477 mbd, up 8.1% y-o-y.
Crude oil exports, 1.461 mbd, down 566k bpd.
Petroleum product exports, 4.742 mbd, down 885 mbd. 4-week avg, 5.263 mbd, up 11.3% y-o-y.
Crude and petroleum product exports combined, 6.203 mbd, down 1.451 mbd.
Summary and analysis
The main feature of this report is the sharp decline in crude and petroleum product exports. This is likely China reacting in kind to US tariffs. On a positive note, gasoline demand was up firmly in the latest week. A few more weeks of this, with gasoline production basically unchanged y-o-y and we could start to see renewed declines in gasoline inventories. For now, however, crude prices should remain under pressure due to declining exports and high domestic production. I would add that the downside is limited because economic activity remains strong.
