‘Demand for refined products remains weak for this time of the year, which will be a cause for concern over the coming weeks if demand fails to recover.’ – Abhishek Kumar, Interfax Energy’s Global Gas Analytics
Last week, US crude oil inventories dropped more than expected, while gasoline and distillate stocks rose markedly, owing to increased production at refineries. The EIA reported on Wednesday that US crude stockpiles fell 3.6M barrels in the week ending April 21, following the preceding week’s decline of 1.0M barrels and surpassing expectations for a 1.1M barrel decrease. It marked the third consecutive weekly decline in crude oil inventories and provided support to oil prices. At this time of the year refineries start boosting production ahead of the summer driving season. Therefore, crude inventories are set to fall further, pushing the oil price higher. Refineries’ production rose 347,000 barrels per day to 17.3M barrels per day, while the utilisation rate climbed 1.2% to 94.1%, the highest since November 2015. Crude imports rose to 7.8M barrels per day, whereas exports climbed to 1.2M barrels per day, the highest since February 17. Nevertheless, consumption remained subdued, as total production demand dropped 2.2% on an annual basis to 19.5M barrels per day. The EIA also said that gasoline stockpiles advanced 3.4M barrels, while analysts anticipated a 1.0M barrel decline. Moreover, distillate stocks climbed 2.7M barrels, topping expectations for a 1.0M barrel fall.
