S&P Global Platts Preview of U.S. EIA Data: Likely to Show Gasoline Stocks Fell 1.6 Million Barrels

By S&P Global Platts Oil Futures Editor Geoffrey Craig

NEW YORK - April 03, 2018

Ample gasoline supply on the US Gulf Coast has traders looking to the tighter Atlantic Coast market, in addition to exports, to help drain tanks amid the seasonal transition from winter-grade to summer-grade products, according to an S&P Global Platts preview of this week’s pending U.S. Energy Information Administration (EIA) oil stocks data.

Survey of Analysts Results:
(The below may be attributed to the S&P Global Platts survey of analysts)

  • Gasoline stocks expected to draw 1.6 million barrels
  • Distillate stocks expected to decline 925,000 barrels
  • Crude stocks expected to rise 575,000 barrels
  • Refinery utilization expected to increase 0.1 percentage point

S&P Global Platts Analysis:
(The below may be quoted in part or full, with attribution to S&P Global Platts Oil Futures Editor Geoffrey Craig)

Gulf Coast gasoline stocks were close to parity with the five-year average at the end of January, but the cushion to historical levels then grew with the region undergoing a light maintenance season.

USGC stocks have been at a growing surplus since the beginning of the year. Stocks last week totaled 84.2 million barrels, putting them 8.4% above the five-year average of EIA data. In late-January, stocks were at parity with the five-year average.

One reason for ample storage levels has been relatively strong refinery activity over the winter. For the last six weeks, USGC utilization has averaged 89% of capacity, versus an average of 87.1% from 2013-17.

The uptick has been particularly notable recently, with utilization averaging 92.8% over the last two weeks. Some facilities might have moved ahead planned winter repairs to early autumn, when they were already fixing the damage done by Hurricane Harvey.

Gasoline inventories usually decline in the spring. Analysts surveyed Monday by S&P Global Platts expect total gasoline stocks fell 1.6 million barrels last week. The five-year average shows a draw of 101,000 barrels.

The Atlantic Coast market has been considerably tighter. Inventories there have been below the five-year average almost every week so far this year, with the discount widening in March.

For the week ending March 23, USAC gasoline stocks were 9.3% less than the five-year average at 56.3 million barrels.

Atlantic Coast refinery utilization averaged 77% the week ending March 23, its lowest level in almost a year, keeping inventories tight.

Analysts are looking for the total US refinery utilization rates to have risen by 0.1 percentage point last week to 92.4 of capacity.

It's possible that the USAC utilization rate will now pick up, in line with seasonal norms, heading into the warmer months.

The NYMEX RBOB crack spread against WTI jumped from around $12/b to more than $19/b late February because of the transition from winter-grade RBOB to the more expensive summer-grade contract.

But the increase can be deceiving as gasoline cracks remain surprisingly soft given USAC inventory levels. The RBOB crack averaged $19.81/b last week, versus a five-year average of roughly $26/b.

Aside from local output and despite an increase in imports from Europe, the bulk of USAC supply comes from the Gulf Coat. The Colonial pipeline system from Houston to Linden, New Jersey supplies the remaining 60% of the incoming supply of gasoline into the Atlantic Coast.

Spreads between the two regions indicate an open and active arbitrage. Gulf Coast CBOB was assessed Thursday by Platts 17 cents/gal below NYMEX RBOB futures, while the differential for CBOB in the New York Harbor stood at a deficit of 4.75 cents/gal, more than enough to cover the 5.50 cents/gal Colonial tariff.

But Colonial's 1.37 million b/d Line 1, as usual, has been running at full capacity, so that extra demand translates into competition for line space. Line space on Line 1 has been assessed in positive territory since March 6, averaging 1.86 cents/gal over the last three weeks.


With the Colonial Pipeline fully allocated, exports represent a key outlet for Gulf Coast supply. Greater exports will also help drain the tanks of winter-grade gasoline sitting in storage.

One supportive factor for US gasoline exports has been the decline in refinery output in Mexico, forcing the country to import more fuel.

Mexico's six refineries produced 164,000 b/d of gasoline on average in February, the lowest level since at least January 2010, according to data from SENER, Mexico's Energy Secretariat.

A pair of refineries at Minatitlan and Ciudad Madero produced just 4,500 b/d of gasoline in February, which 90% less than the year prior level.

US gasoline exports topped 1 million the week ending March 23, the first time this has happened in the first quarter of the year, according to Energy Information Administration data going back to 2010.


Analysts expect distillate stocks declined last week by 925,000 b/d last week, compared with an average draw of 140,000 b/d from 2013-17.

Crude stocks are expected to have built by 575,000 barrels. The five-year average shows an increase of nearly 1.7 million barrels for the same week.

Inventories have risen seven of the last nine weeks through March 23 by 18.3 million barrels, which is smaller-than-normal for this time of year. As a result, crude stocks now sit 1.5% below the five-year average, versus a surplus of 3.9% nine weeks ago.

Apart from headline figures, traders will also be paying attention to US crude production, which has increased almost non-stop since November 2016.

Output averaged 10.433 million b/d the week ending March 23, an all-time high, according to EIA estimates that go back to 1983.

For more information on crude oil, visit the S&P Global Platts website.

Global, Americas, Asia: Kathleen Tanzy, + 1 917 331 4607, kathleen.tanzy@spglobal.com.

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