Key Takeaways:
- U.S. crude inventories are expected to increase by 5.0 million barrels for the week ending January 9, according to Macquarie strategists.
- The increase follows a 3.8 million barrel draw in the prior week, with the crude balance realizing relatively close to expectations.
- Refinery crude runs are expected to decrease by 0.1 million barrels per day, while net imports are expected to increase due to a sharp decrease in exports and a slight increase in imports.
- The Strategic Petroleum Reserve (SPR) stocks are expected to increase by 0.2 million barrels for the week ending January 9.
- Total petroleum stocks, including crude oil and other products, stood at 1.707 billion barrels on January 2, up 8.4 million barrels week on week and 78.7 million barrels year on year.
Introduction to the Report
In a recent oil and gas report, Macquarie strategists, including Walt Chancellor, revealed their forecast for U.S. crude inventories. According to the report, U.S. crude inventories are expected to increase by 5.0 million barrels for the week ending January 9. This follows a 3.8 million barrel draw in the prior week, with the crude balance realizing relatively close to expectations. The strategists noted that the timing of cargoes remains a source of potential volatility in the weekly crude balance, and that there may be some lingering potential for noise from year-end effects.
Crude Inventory Forecast
The Macquarie strategists provided a detailed breakdown of their forecast, including a modest reduction in crude runs from refineries, a healthy increase in net imports, and a small nominal increase in implied domestic supply. They also noted that they expect another small increase in SPR stocks for the week ending January 9. The strategists highlighted that among products, they expect another large build led by gasoline, with distillate and jet stocks also higher. They modeled implied demand for these three products at approximately 13.6 million barrels per day for the week ending January 9.
Comparison to Previous Reports
In its latest weekly petroleum status report, the U.S. Energy Information Administration (EIA) highlighted that U.S. commercial crude oil inventories, excluding those in the SPR, decreased by 3.8 million barrels from the week ending December 26 to the week ending January 2. Total petroleum stocks, including crude oil and other products, stood at 1.707 billion barrels on January 2, up 8.4 million barrels week on week and 78.7 million barrels year on year. The EIA’s report also provided data on crude oil stocks, including the SPR, which stood at 413.5 million barrels on January 2.
Macquarie’s Previous Forecast
In a previous report, Macquarie strategists forecast that U.S. crude inventories would be down by 3.5 million barrels for the week ending January 2. This followed a 1.9 million barrel draw in the prior week, with the crude balance realizing tight relative to expectations alongside oddly low import levels, particularly from Canada. The strategists noted that the timing of cargoes remained a source of potential volatility in the weekly crude balance, and that there may be some lingering potential for noise from year-end effects.
Conclusion and Future Reports
The EIA’s next weekly petroleum status report is scheduled to be released on January 14, and will include data for the week ending January 9. The report provides timely information on supply and selected prices of crude oil and principal petroleum products. Macquarie describes itself as a global financial services group operating in asset management, retail and business banking, wealth management, as well as advisory, and risk and capital solutions across debt, equity, financial markets, and commodities. The company’s reports and forecasts provide valuable insights into the oil and gas market, and are closely watched by industry professionals and investors.