US crude stocks expected to increase as runs continue to ease

US crude oil stocks likely continued to climb the week ended Oct. 11, analysts surveyed by S&P Global Commodity Insights said Oct. 14, as runs continued to ease amid turnarounds.

Commercial crude stocks likely climbed 1.7 million barrels to around 424.4 million barrels over the period, analysts said. This level would mark the highest crude inventory seen since mid-August this year but remains far less than the 6.3 million barrel build that the US Energy Information Administration data showed as average for the period over the past five years.

Still, the increase would put US crude stocks 4.7 million barrels ahead of the year-ago levels while less than 4% below the five-year average for this time of year.

Crude imports were expected to remain steady at around 6.2 million b/d, while exports could climb to 4.3 million b/d compared with last week's 3.8 million b/d.

The lack of major hurricane-related refinery disruptions so far this season has pressured crude stocks. The 2024 Atlantic hurricane season has had four major hurricanes so far, but only hurricanes Beryl and Francine resulted in meaningful refinery impacts.

Seasonal turnarounds at refineries have trimmed runs, but Commodity Insights analysts expected runs were unlikely to drop further, positioning them at a level well above what is considered historically average for this time of year.

Analysts surveyed saw overall refinery utilization at 86.2% of capacity, a decline of 0.5 percentage point on the week, and refinery net crude inputs at 15.7 million b/d, flat for the last two weeks.

At those levels, refinery utilization and net crude demand would be around 3.8% above the EIA five-year average, which is considered normal for this time of year as refineries enter maintenance season.

Runs were expected to move higher as Gulf Coast refineries gradually ramp up, but Midwest and West Coast refinery runs will likely lag behind due to ongoing maintenance, analysts said.

Refinery demand is expected to decline in in coming weeks as turnarounds pick up, led by BP's Whiting refinery. Maintenance will result in around 2.7 million b/d of refinery capacity being idled in October, Commodity Insights data showed, up from 1.3 million b/d in September.

Overall lower refinery utilization has supported margins in recent weeks. The US Gulf Coast WTI MEH cracking margin has averaged $9.06/b to date in October, Commodity Insights data showed Oct. 14, up from the $7.68/b in September.

Total US gasoline stocks likely declined 1 million barrels to 213.9 million barrels, analysts said, while distillate inventories were expected to slip 2.5 million barrels to around 116 million barrels.