Crude Oil Selloff Could Resume in Weeks as Cushing Approaches Full Capacity

WTI crude oil price consolidated after the collapse in the previous week. Crude oil inventory continued to increase despite slowdown in pace. The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks rose +10.41 mmb to 1377.51 mmb in the week ended April 24. Crude oil inventory rose +8.99 mmb (consensus: +10.62 mmb) to 527.63 mmb. Stockpile rose in 2 out of 5 PADDs. PADD 3 (Gulf Coast) saw a build of 7.12 mmb. PADD 2 (Midwest) saw a +3.33 mmb  increase. Cushing stock gained +3.64 mmb to 63.38 mmb, suggesting that the delivery point for WTI crude oil is over 80% full. If inventory level continues to increase in the current pace, storage will be full by early- to mid- May. This could cause massive selloff in the June contract which will expire on May 19. Utilization rate added +2 percentage points to 69.6% while crude production slipped -0.1M bpd to 12.1M bpd for the week. Crude oil imports added +0.37M bpd to 5.3M bpd in the week.

Concerning refined oil product inventories, gasoline inventory dropped -3.67 mmb to 259.57 mmb as demand jumped +10.3% to 5.86M bpd. The market had anticipated a +2.53 mmb increase in stockpile. Production soared +9.5% to 6.57M bpd while imports slumped -38% to 0.23M bpd during the week. Distillate inventory rose +5.09 mmb to 141.97 mmb. The market had anticipated a +3.6 mmb increase. Demand added +1.2% to 3.15M bpd. Production slipped -0.5% to 4.98 mmb while imports jumped +121.7% to 0.24M bpd during the week.

Released after market close on Wednesday, the industry-sponsored API estimated that crude oil inventory soared +9.99 mmb during the week. For refined oil products, gasoline stockpile dropped -1.11 mmb while distillate rose +5.46 mmb.

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