MOSCOW (MRC) -- US crude oil stockpiles fell in the second week of August even as net imports jumped sharply, while fuel demand dipped as well, reported Reuters with reference to the US Energy Information Administration's statement.
Crude inventories fell by 1.6 million barrels in the week to Aug. 14 to 512.5 million barrels, less than analysts’ expectations in a Reuters poll for a 2.7 million-barrel drop.
Net US crude imports rose by 1.1 million barrels per day to 3.6 MMbpd, the EIA said.
Fuel demand dropped by more than 2 MMbpd to 17.2 MMbpd in terms of product supplied. Overall fuel demand is down 14% from the year-ago period over the last four weeks.
As the summer driving season comes to a close, overall fuel demand tends to decline.
Prices rose briefly following the report. U.S. crude futures were down 26 cents, or 0.6%, to USD42.63 a barrel by 11:01 a.m. ET (1501 GMT), while Brent dropped 37 cents to USD45.09 a barrel.
Refinery crude runs fell by 171,000 bpd in the last week, EIA said, while refinery utilization rates fell by 0.1 percentage point.
US gasoline stocks fell by 3.3 million barrels to 243.8 million barrels, the EIA said, compared with analysts’ expectations for a 1.1 million-barrel drop.
Distillate stockpiles, which include diesel and heating oil, rose by 152,000 barrels, versus expectations for a 557,000-barrel drop. Overall distillate stockpiles sit at 177.8 million barrels, just off a 38-year-high set last month.
“It is concerning that distillate inventories continue to remain at very high levels as refiners blend excess jet fuel supplies into diesel,” said Andrew Lipow, president at Lipow Oil Associates in Houston.
As MRC wrote previously, US crude oil inventories moved sharply lower during the week ended July 24 as exports and refinery demand climbed to multi-month highs, US Energy Information Administration data showed July 29.. Commercial crude stocks fell 10.61 million barrels to 525.97 million barrels last week, EIA data showed. While the draw pushed stockpiles to 14-week lows, they remained more than 17% above the five-year average for this time of year. The inventory draw was concentrated on the US Gulf Coast, where stocks fell 10.46 million barrels to 295.51 million barrels, and on the US West Coast, where stocks fell 1.7 million barrels to 52.75 million barrels, the lowest since mid-March.
Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.
And in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.