US distillate stocks edge lower despite strong refinery margins

US distillate fuel oil stocks likely dipped to multiweek lows as strong global demand boosts exports, according to analysts surveyed by Platts on October 12. Nationwide distillate supplies fell 33,000 barrels to around 104.8 million barrels during the week to October 9, the analysts reported. This fifth consecutive weekly reduction would leave stockpiles 9.8% below the five-year average of the US Energy Information Administration and at the lowest outright level since August 28, as per Platts data.

US distillate imports dwindled to 118,000 barrels per day (b/d) the previous week, while exports surged by 260,000 b/d to 1.79 million b/d, as per S&P Global Energy CERA data. So far this month, diesel and gasoil exports averaged 1.9 million barrels per day in October, up from 1.4 million b/d in September, according to S&P Global Commodities at Sea.

US gasoline stocks likely declined by 680,000 barrels to 204.1 million barrels, narrowing the deficit to the five-year seasonal average to 5.6%. Nationwide refinery utilization likely increased to 92.9% of capacity, said the analysts. US refinery margins remain robust. The USGC WTI MEH cracking margin averaged $54.61 per barrel during the week to October 9, up from $50.13 per barrel for the full month of September, according to CERA data.

ULSD cracks also surpassed record highs from September. The USGC ULSD crack versus WTI MEH climbed to $104.45 per barrel last week from an average of $101.03 per barrel in September. Gasoline cracks fell to $56.46 per barrel, while jet fuel crack climbed to $96.81 per barrel during the week to October 9 from September averages of $53.97 per barrel and $86.77 per barrel, respectively, as per CERA data.

US crude stocks likely fell 2.54 million barrels to 421.6 million barrels, putting stocks roughly in line with the EIA’s five-year average, the analysts concluded.