The American Petroleum Institute (API) had estimated a crude oil inventory build of 401,000 barrels for the week ending Aug 29, compared to analyst expectations of a 3.50-million barrel draw. There will be an explanation for the disparity but that is not the most important thing at the moment
Had that been confirmed by EIA figures, the inventory build this week would have taken away from last week’s draw in crude oil inventories of 11.1 million barrels, according to API data. The EIA estimated that week there was an inventory draw of 10.0 million barrels. It is on such figures that bulls are reared. The implication being a steady inexorable draining of OECD crude inventories, on the way to balancing the market.
However the EIA bemused oil traders after Labor Day, when it reported that U.S, crude supplies declined by 4.8 million barrels for the week ended August 30 in line with analysts previous calculations. If nothing else this episode has re-inforced to the market the effect of the inventory numbers have on it. It has also perhaps emphasised the importance of the EIA and their numbers to the detriment of the API. Is it now conventional wisdom to wait for the EIA numbers?
Currently apart from China's GDP growth and PMI numbers and possibly with the exception of Trump's oil market tweets, the inventory figures have had the most pronounced effect on global oil market benchmarks as the markets actors see them as reliable integers of market equilibrum for pricing reasons.
The EIA report went on further in detailing U.S. crude oil refinery inputs which averaged 17.4 million barrels per day during the week ending August 30, 2019, which was 27,000 barrels per day less than the previous week’s average. Refineries operated at 94.8% of their operable capacity last week. Gasoline production decreased last week, averaging 10.3 million barrels per day. Distillate fuel production decreased last week, averaging 5.2 million barrels per day.
U.S. crude oil imports averaged 6.9 million barrels per day last week, up by 976,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.9 million barrels per day, 12.5% less than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 717,000 barrels per day, and distillate fuel imports averaged 126,000 barrels per day.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 4.8 million barrels from the previous week. At 423.0 million barrels, U.S. crude oil inventories are at the five year average for this time of year.