Gasoline stocks likely to fall, crude oil stocks to rise this week – Platts

US Gulf Coast faces more punishing weather, a storm called Tropical Depression Nine forecasted to land later this week

US Gulf Coast refinery outages combined with stepped-up demand in preparation for the US Labor Day holiday may have helped pull gasoline barrels from storage last week, according to a preview analysis of US Energy Information Administration data by S&P Global Platts.

Severe flooding on the Gulf Coast has caused major disruptions at several refineries, cutting gasoline production by 247,000 b/d to 2.05 million b/d the week ended Aug. 19, the lowest since early June.

A string of units remained down last week, although there have been some signs of recovery.

ExxonMobil’s plants in Baton Rouge, Louisiana, and Baytown, Texas, still face outages, and Marathon Petroleum experienced issues with an ultracracker at its Galveston Bay, Texas, refinery.

Additionally, Motiva had flaring at its facility in Norco, Louisiana.

At one point last week, Gulf Coast conventional gasoline was assessed at New York Mercantile Exchange Oct. reformulated blend stock for oxygenate blending plus 15 cents/gal, or $1.5737/gal, its highest outright value since June 1.

LyondellBasell, however, has restarted a fluid catalytic cracker at its Houston refinery, which may help offset the outages.

Analysts surveyed Monday by S&P Global Platts expect the EIA data to show a gasoline inventories decline of 1.1 million barrels the reporting week ended Aug. 26.

A drawdown in gasoline stocks would help inventories align more closely with historical levels, but any sense of bullishness could be neutralized by falling crude demand stemming from the same refinery outages.

Analysts surveyed expect refinery utilization to have fallen 0.4 percentage points to 92.1 per cent of capacity, which correlates to their expectations of a 600,000-barrel build in crude oil stocks.

Analysts are looking for distillate stocks to be unchanged for the latest reporting week, despite the five-year average of EIA data, which shows that inventories typically rise by approximately 500,000 barrels during this reporting period.

The US Gulf Coast could face another round of punishing weather, with a storm called Tropical Depression Nine forecasted to make landfall later this week. There is risk of another tropical storm hitting the North Carolina coast early this week, which could affect gasoline demand.

US Atlantic Coast gasoline stocks have declined the last four reporting periods, helping to erase part of the large inventories surplus that has accumulated in the region.

Despite the recent streak of drawdowns, US Atlantic Coast gasoline stocks total 69.1 million barrels, a 23 per cent surplus to the five-year average for this period of the year.

One factor propelling USAC gasoline stocks is imports, which have exceeded year-ago levels for 15 of the last 20 weeks.

According to an S&P Global Platts analysis last week, some four tankers carrying 1.5 million barrels of gasoline were expected to make the journey across the Atlantic in the pending week, as well as a pair of tankers with 675,000-b/d of clean cargoes.

This was down from earlier this summer when 4.6 million barrels of gasoline would travel from Europe to the Atlantic Coast on a weekly basis.

LABOR DAY

Factors that may tighten the gasoline market include the upcoming US Labor Day holiday Sept. 5 and the end-of-summer driving season, followed by the autumn refinery maintenance period.

Because the turnaround season also means less crude demand, the question facing the market will be whether imports can moderate enough to prevent large builds.