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US Crude Inventory Fell More Than Expected, All Eyes on OPEC Meeting This Friday

Crude oil prices recovered US inventory fell more than expected. The focus this week is undoubtedly the OPEC meeting in Vienna on June 22-23. the cartel members, together with some non-OPEC producers, would discuss the possibility of raising output. A Bloomberg report suggests that the producers are considering an increase in output by 0.3M- 0.6M bpd. Yet, Iran, Iraq and Venezuela signal that they might veto the proposal.

EIA Weekly Inventory Report

The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products stocks climbed +0.19 mmb to 1208.16 mmb in the week ended June 15. Crude oil inventory fell -5.91 mmb (consensus: -1.9 mmb) to 426.53 mmb, as inventories decreased in ALL PADDs. PADD II saw inventory draw of -4.17 mmb Cushing stock slipped -1.3 mmb to 32.62 mmb. Utilization rate added +1% to 96.7%. Meanwhile, crude production steadied at 10.9M bpd for the week.

Refined oil product inventories rose further. Gasoline inventory soared +3.28 mmb to 240.04 mmb as demand plunged -5.6% to 9.33M bpd. The market had anticipated a +0.19 mmb increase in stockpile. Production fell -3.37% to 10.1M bpd while imports rose +3.16% to 0.85M bpd during the week.

Distillate inventory increased +2.72 mmb to 117.41 mmb. The market had anticipated a -0.16 mmb drop. This came in as a result of a -13.15% decline in demand to 3.83M bpd.  Production gained +6.99% to 5.47M bpd while imports slumped -52.9% to 0.05M bpd during the week.

Released after market close on Tuesday, the industry- sponsored API estimated that crude oil inventory dropped -1.9 mmb during the week. For refined oil products, gasoline stockpile rose +2.11 mmb while distillate added -0.75 mmb.

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