US refined products inventories tighten as exports climb

US gasoline and distillate inventories tightened the week ended March 10 as exports climbed, data released March 15 by the US Energy Information Administration showed.

US distillate stocks fell 2.5 million barrels to 119.7 million barrels, EIA data showed. Stocks fell 2.7 million barrels to 33.8 million barrels on the US Atlantic Coast, which would have likely been more supportive for the New York-delivered NYMEX ULSD contract had the entire futures complex not been pushed lower March 15 by long liquidation stemming from a banking crisis.

USAC stocks are now 17% below the five-year average, widening from an 11% deficit the prior week.

While ULSD futures tumbled March 15, crack spreads remain elevated as planned and unplanned refinery outages threaten to reduce already tight Atlantic Basin inventories. The NYMEX front-month ULSD crack against WTI crude was trading around $42/b March 15, which should continue to encourage operating refiners to maximize runs.

US distillate production has fallen even as refiners upped crude inputs last week. Distillate production at 4.4 million b/d last week was down 97,000 b/d from the prior week and down 272,000 b/d from the week ended Feb. 17, EIA data showed.

Likewise, distillate imports, which primarily head into the USAC, have fallen in recent weeks. On a four-week moving average, US distillate imports at 227,000 b/d last week was down from 410,000 b/d in mid-February.

Distillate exports climbed for the second consecutive week. At 1.2 million b/d, exports were up 264,000 b/d from the week ended Feb. 24.

Refined export volumes rising

Kpler vessel tracking data shows US refined products exports climbing to 71.7 million barrels in March from 50 million barrels in February. While the data is preliminary and the bulk of that increase is seen in undefined "clean products," the increase reflects an increased pull on US supply.

Kpler data shows US refined products exports increasing into Europe, Central America and Asia, for instance.

Brazil is importing more refined products in March, from several origins, including the US, India and Russia. Brazil's Petrobras started 60 days of planned maintenance at its Refinaria Presidente Bernardes de Cubatao refinery in Sao Paulo.

Product dispatches have been blocked at most French refineries as part of the protests against the government's pension reform plans. The strikes have also halted operations at three of France's four LNG import terminals. The strikes at three terminals operated by France's Elengy, Montoir-de-Bretagne, Fos Cavaou and Fos Tonkin, have been extended by a further week until March 21, a company spokesperson said March 15.

Gasoline outflows grow

A rise in US gasoline exports contributed to decline in gasoline stocks last week. Exports at 891,000 b/d were up from 831,000 b/d the prior week and 651,000 b/d the week ended Feb. 24, EIA data showed. Gasoline imports at 281,000 b/d last week were down from 559,000 b/d the week ended Feb. 24.

US gasoline stocks at 236 million barrels last week were down 2.01 million barrels on the week, but were relatively well-supplied compared to diesel, at 2% below the five-year average.

Low refinery runs have boosted crude inventories. US stocks at 480.1 million barrels last week were up 1.6 million barrels on the week and up 66.2 million barrels from early December, EIA data showed.

Last week's stock increase likely would have been larger had net crude inputs last week not climbed 431,000 b/d to 15.4 million b/d. Also, US crude exports last week jumped 1.7 million b/d to 5 million b/d.

Kpler data shows US crude exports climbing to 140.4 million barrels in March, up from 108.2 million barrels in February, with increased flows to China and Europe.