US crude inventories likely climbed last week as many refiners remained in maintenance and imports climbed. Analysts polled by S&P Global Platts were looking for crude stocks to have climbed 2.5 million barrels. A build of this size would put US inventories at 435.65 million barrels, roughly on par with the five-year average, based on the most recent US Energy Information Administration data.
And despite low refinery utilization rats across the country, US refiners are in the process of returning from fall maintenance. Analysts expect refiners to have increased operations by 0.5 percentage points to 85.7% of capacity last week. Roughly 2 million b/d of combined distillation capacity in the US Midwest and US Gulf Coast was down for maintenance last week, according to S&P Global Platts Analytics data. That was down from a peak 2.4 million b/d the week ending October 11.
By the end of November, just 298,000 b/d of capacity is expected to be down for maintenance, bolstering crude demand. US crude output was expected to remain steady to higher, averaging at least 12.6 million b/d last week. Crude imports remain the wild card, and will determine whether the weekly data shows a crude inventory build, as is typical this time of year, or another draw.
Imports averaged 6.3 million b/d for the four weeks ended October 11, but then fell to 5.85 million b/d for the week ending October 18. If this weaker level holds, US crude inventories would likely draw. Preliminary import data from the US Census shows a decline in crude imports into the US Gulf Coast for the seven days ended October 24. While imports from Mexico climbed, imports from Colombia and Brazil slid, the data showed.
Census data also shows waterborne imports into the US West Coast and US Atlantic Coast falling. But the Census import data does not necessarily line up with the EIA import data on a weekly basis. And Census does not track Canadian crude imports by pipeline and rail, which makes up the bulk of US imports, and could start to rise as Midwest refiners return from maintenance.
US crude exports likely slipped last week from the 3.3 million b/d figure EIA reported for the week ended October 18, which would also help to produce a stock build.