MOSCOW (MRC) -- U.S. crude stocks rose less than expected last week as refineries hiked output, while gasoline and distillate inventories fell, the Energy Information Administration said, as per Hydrocarbonprocessing.
Crude inventories rose by 414,000 barrels in the last week, compared with analysts’ expectations for an increase of 2.5 million barrels. Refinery crude runs rose by 190,000 barrels per day, EIA data showed. Refinery utilization rates rose by 1.4 percentage points. Net U.S. crude imports fell last week by 1.03 million barrels per day.
“A solid tick higher in refining activity and a firm drop in net imports has resulted in minor build to crude stocks,” said Matt Smith, director of commodity research at ClipperData. “This lesser build than expected, combined with draws to the products, is providing further encouragement for today’s rally."
Oil prices extended gains after the data, with Brent crude up about 1% and U.S. crude futures gaining about 1.6% by 11:29 a.m. ET (1629 GMT). Still, in the East Coast, refinery utilization rates dropped to the lowest level since November 2012, the data showed.
The gasoline-producing unit at Phillips 66’s Bayway Refinery in Linden, New Jersey, the largest on the East Coast, has been shut since early this month. Gasoline stocks fell by about 2 million barrels, compared with analysts’ expectations in a Reuters poll for a 435,000-barrel gain.
Distillate stockpiles, which include diesel and heating oil, fell by 636,000 barrels, versus expectations for a 1.5 million-barrel drop, the EIA data showed. “The refinery utilization rate is probably the most important number here. It looks like turnaround season is basically over, said Bob Yawger, director of energy futures at Mizuho in New York. “That’s the number that managed to lower the crude oil build.” Crude stocks at the Cushing, Oklahoma, delivery hub fell by 133,000 barrels, EIA said.
As MRC informed earlier, brent oil futures may be trading at USD27 per barrel but oil producers are selling their crude in the physical market at lower prices not seen since the aftermath of the Asian financial crisis of the late 1990s. Most are offloading their oil for below USD20 a barrel as the coronavirus pandemic savages demand and global supply rises amid a battle between Saudi Arabia and Russia for market share, according to traders, state oil firms, major refiners and prices quoted in physical markets.
As MRC informed earlier, US-based Phillips 66 is delaying three sizeable scheduled shutdowns at its refineries this year, the company said last week, because of concerns that coronavirus could spread among the refineries' workers if the maintenance goes ahead.
We also reminad that Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).