MOSCOW (MRC) - US crude oil inventory draws likely extended in the week ended June 25 against a backdrop of rising refinery demand, reported S&P Global.
Total commercial crude oil stocks are expected to have declined 4.7 million barrels to around 454.4 million barrels, analysts surveyed by S&P Global Platts said. The draw would put inventories at the lowest since March 2020 and leave them 6.3% behind the five-year average of US Energy Information Administration data, opening the widest deficit to that average since August 2008.
The draw comes as analysts expected refinery utilization to have pushed to around 92.9% of capacity in the week ended June 25, up 0.7 percentage point from the week prior and the highest since early January 2020.
Refinery margins turned higher last week, with US Gulf Coast WTI MEH cracking margins averaging USD11.86/b in the five days ended June 24 up from USD10.63/b seen the week prior.
Refinery margins were likely supported by strong refined product demand. US Transportation Security Administration data show nearly 2 million passengers per day crossed checkpoints last week, up 4% from the week prior and more than 250% above year-ago levels.
Total refinery net crude demand is expected to have averaged 16.35 million b/d in the week ended June 25, S&P Global Platts Analytics data shows, from an EIA-reported 16.11 million b/d during the week prior.
Total gasoline inventories are expected to have declined around 700,000 barrels to 239.04 million barrels, analysts said, putting them nearly 1% behind the five-year average. Notably, while overall gasoline stocks have tightened in recent weeks, inventories in high demand regions such as the US Atlantic Coast and Midwest have been trending higher.
Following five consecutive weekly builds, USAC gasoline stocks were 1.4% above average in the week ended June 18, EIA data shows, while during the same period Midwest stocks climbed for a third week to just 6% behind average, the narrowest deficit since early January.
Distillate inventories are expected to have climbed 100,000 barrels to 138 million barrels, analysts said. In contrast to gasoline inventories, USAC diesel stocks remain very tight despite steadily building since late May.
As MRC informed before, crude oil futures ticked higher in mid-morning trade in Asia June 23 after the American Petroleum Institute (API) reported a large draw in US crude inventories as the market awaited the July 1 OPEC+ meeting,
We remind that Indian refiners, anticipating a lifting of US sanctions, plan to make space for the resumption of Iranian imports by reducing spot crude oil purchases in the second half of the year. The world's third-largest oil consumer and importer halted imports from Tehran in 2019 after former US President Donald Trump withdrew from a 2015 accord and re-imposed sanctions on the OPEC producer over its disputed nuclear programme.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
MRC