Weekly Oil Storage Report - U.S. Crude Exports Constrained

Summary

• EIA reported a crude storage draw of 3.62 million bbls vs. our forecast of a 4.2 million bbl draw.
• The Brent-WTI spread blowout continues to point to lack of infrastructure to ramp U.S. crude exports higher. But there is new capacity coming online over the next 18 months.
• EIA's 914 report showed March U.S. oil production tracking nicely to the weekly estimate, but the positive adjustment factor in March was likely the result of overstated U.S. crude exports.

Welcome to the weekly oil storage report edition of Oil Markets Daily!

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Highlights

EIA reported a crude storage draw of 3.62 million bbls versus our forecast of a 4.2 million bbl draw. The draw was higher than the five-year average, all thanks to a large jump in refinery throughput (+527k b/d w-o-w).

EIA reported that U.S. crude imports decreased 528k b/d (in line with third-party estimates), and exports increased by 431k b/d w-o-w (higher than third-party estimates). The adjustment factor jumped by 120k b/d w-o-w to +337k b/d, which in our view is largely explained by the overstated exports.

Today was also the release of the EIA 914 March U.S. monthly oil production figure, and the monthly is closely tracking the weekly. For the month of March, the average adjustment factor was +304k b/d, while the tracking error average for U.S. crude exports was overstated by +202k b/d. In our view, this confirms what we've seen in the recent weekly data, which is that EIA's crude exports have been overstated, resulting in the adjustment factor to be consistently positive. This is not attributed to understated production.

Turning to the product side, the build in gasoline storage of +534k bbls was bearish compared to the five-year average draw of 2.195 million bbls. Exports were down, and higher refinery throughput explained the minor build. Distillate storage also saw a build of +643k bbls, which was slightly higher than the five-year average of +382k bbls. Overall, total liquid stockpile came in lower

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