Macquarie Strategists Forecast USA Crude Inventory Drop

In an oil and gas report sent to Rigzone late Monday by the Macquarie team, Macquarie strategists revealed that they are forecasting that U.S. crude inventories will be down 4.4 million barrels for the week ending April 18.

“This compares to our early look which anticipated a 0.3 million barrel build,” Macquarie strategists said in the report.

“On the product side of the ledger, in aggregate, our expectations are little changed,” they added.

In the report, the strategists noted that, “for this week’s crude balance, from refineries”, they “model crude runs up (+0.3 million barrels per day) following another strong print last week”.

“Among net imports, we model a moderate increase, with exports sharply lower (-0.9 million barrels per day) and imports also significantly down (-0.4 million barrels per day) on a nominal basis,” they added.

The strategists warned in the report that timing of cargoes remains a source of potential volatility in this week’s crude balance.

“Further, given significantly tighter than expected crude balances in the prior two weeks, we see some potential for weaker stats than our balance suggests this week,” the strategists highlighted.

“From implied domestic supply (prod.+adj.+transfers), we look for a reduction (-0.9 million barrels per day) following a strong nominal print last week. Rounding out the picture, we anticipate a larger increase in SPR [Strategic Petroleum Reserve] stocks (+0.5 million barrels) this week,” they added.

The strategists went on to reveal in the report that, “among products”, they “look for draws led by gasoline (-3.0 million barrels), with distillate (-1.1 million barrels) and jet (+1.1 million barrels) stats offsetting this week”.

“We model implied demand for these three products at ~14.0 million barrels per day for the week ending April 18,” they added.

In an oil and gas report sent to Rigzone late last week by the Macquarie team, Macquarie strategists outlined that they anticipated “a minimal U.S. crude build” in the U.S. Energy Information Administration’s (EIA) next weekly petroleum status report.

That report is scheduled to be released on April 23 and will include data for the week ending April 18.

“Looking ahead to next week’s release, we anticipate a minimal U.S. crude build (+0.3 million barrels), with runs up (+0.4 million barrels per day) and net imports rebounding considerably (+1.4 million barrels per day), nominal implied supply correcting lower (-1.0 million barrels per day), and a larger increase in SPR inventory (+0.6 million barrels) on the week,” the Macquarie strategists stated in last week’s report.

“We note potential for volatility in these figures given the incomplete nature of this week’s data. Likewise, we would not be altogether surprised if crude realized looser than our balances indicate, given outperformance in the past two weeks,” they added.

“Among products, our preliminary expectations point to continued draws in gasoline (-2.2 million barrels) and distillate (-1.2 million barrels), with jet stocks marginally higher (+0.1 million barrels),” they continued.

In its latest weekly petroleum status report at the time of writing, which was released on April 16 and included data for the week ending April 11, the EIA highlighted that U.S. commercial crude oil inventories, excluding those in the SPR, increased by 0.5 million barrels from the week ending April 4 to the week ending April 11.

This EIA report showed that crude oil stocks, not including the SPR, stood at 442.9 million barrels on April 11, 442.3 million barrels on April 4, and 460.0 million barrels on April 12, 2024. The EIA report highlighted that data may not add up to totals due to independent rounding.

Crude oil in the SPR stood at 397.0 million barrels on April 11, 396.7 million barrels on April 4, and 364.9 million barrels on April 12, 2024, the EIA report revealed. Total petroleum stocks – including crude oil, total motor gasoline, fuel ethanol, kerosene type jet fuel, distillate fuel oil, residual fuel oil, propane/propylene, and other oils – stood at 1.605 billion barrels on April 11, the report highlighted. Total petroleum stocks were down 1.8 million barrels week on week and up 3.2 million barrels year on year, the report outlined.

In the Macquarie report sent to Rigzone last week, Macquarie strategists highlighted that, that week, the EIA reported “a small build in commercial crude (+0.5 million barrels) with draws in Cushing (-0.7 million barrels) and across products (gasoline -2.0 million barrels, distillate -1.9 million barrels, jet -1.1 million barrels)”.

“Notably, for the second consecutive week, the crude balance realized substantially tighter than our expectations. While product stocks realized modestly looser than we anticipated, stronger runs and higher yields help bridge this difference,” they added.

“Within the crude balance, runs realized slightly above our expectation this week (+0.1 million barrels per day), following a strong print last week. Net imports were sharply below our expectation (-1.7 million barrels per day), with nominal implied dom. supply (prod.+adj.+trans.) well above our expectation at 14.8 million barrels per day (we modeled ~13.9 million barrels per day),” they continued.

“Among products, implied demand was well above our expectation this week, with gasoline+distillate+jet at 14.3 million barrels per day (vs. ~13.8 million barrels per day estimate), with the trailing four week average at 14.0 million barrels per day vs. 13.9 million barrels per day for the same four weeks last year,” they went on to state.

“Total disappearance (impl. demand + exports) for those three products was modestly above our expectation at 16.5 million barrels per day (vs. ~16.3 million barrel per day estimate), with the trailing four week average at 16.2 million barrels per day vs. 16.4 million barrels per day for the same four weeks last year,” they strategists noted.

In an oil and gas report sent to Rigzone on April 14 by the Macquarie team, Macquarie strategists revealed that they were forecasting that U.S. crude inventories would be up by 7.4 million barrels for the week ending April 11.

To contact the author, email andreas.exarheas@rigzone.com