OECD
Preliminary data for May shows total OECD commercial oil stocks rose by 11.7 mb
for the third consecutive month, ending May at 2,691 mb, which is the highest level
since December 2012. At this level, inventories were almost in line with the five-year
average, but they showed a surplus of 11.0 mb compared to the same time a year ago.
Within the components, crude declined in May by 1.3 mb, while products increased by
13.0 mb.
At 1,302 mb, OECD crude commercial stocks stood at a comfortable level, with a
surplus of 13.0 mb over the five-year average, but remained 16.1 mb below the same
time a year earlier. In contrast, product stocks ended the month of May at 1,390 mb,
remaining tight and showing a deficit of 17.3 mb with the seasonal average. However,
they are at healthy levels compared with the previous year, indicating a surplus of
27.1 mb. Within the three regions of the OECD, the bulk of the build in May was in the
Americas, which rose by 10.6 mb, followed by a 1.1 mb build in Europe, while OECD
Asia-Pacific remained unchanged versus the previous month.
OECD Americas’ inventories rose by 10.6 mb for the third consecutive month to end
the month at 1,375 mb. With this build, inventories are at comfortable levels, indicating
a surplus of 28.5 mb over the same time last year and nearly 56.0 mb higher than the
seasonal norm. This surplus was divided between crude and products, which indicated
a surplus of 35.2 mb and 20.8 mb, respectively. In May, the total stock build came from
products increasing by 15.2 mb, while crude abated this build to decline by 4.2 mb.
A rise in US refinery runs boosted product stocks, while crude oil stocks slowed in
May, following an approximate 30.0 mb build in crude oil stocks during the first fourth
months of this year.
OECD Europe’s inventories rose slightly by 1.1 mb to end the month of May at
908 mb. Despite this build, OECD Europe’s inventories still indicate a deficit of nearly
62 mb with the five-year average and stood around 8.5 mb lower than in the same
period the year before. The deficit with the seasonal average is attributed to both crude
and products, which were down by 25.4 mb and 36.9 mb, respectively. The shortage
with the previous year was divided between crude and products, showing a deficit of
around 2.2 mb and 6.3 mb, respectively.
Commercial inventories in OECD Asia-Pacific remained almost unchanged in May,
following a drop in April to end the month at 408 mb. At this level, they were 9.0 mb
below the same period a year ago and stood at 2.0 mb higher than the last five-year
average. Within the components, crude saw a build of 2.3 mb in May, while products
fell by almost the same amount. Crude inventories stood at 9.4 mb below a year ago, but 3.3 mb higher than the seasonal average. On the product side, OECD Asia-Pacific
total product inventories started to improve, indicating a small gain over a year ago,
however, they remained 1.3 mb below the last five-year average.
In terms of days of forward cover, OECD commercial stocks dropped by 0.3 days in
May to stand at 58.9 days, with demand expected to improve in the next three months.
At this level, inventories were around 1.1 days above the same period last year and
1.2 days more than the latest five-year average. Despite the lower absolute level of
OECD Europe’s inventories, in terms of days of forward cover, they stood at around
67 days in May, reflecting the weakness of demand in this region.
EU plus Norway
Preliminary data for May shows that European stocks reversed the fall of the last two
months and increased by 1.1 mb to stand at 1,075.7 mb. With this build, stocks ended
the month 21.2 mb, or 2.0%, above the same time last year, but they are still 40.0 mb,
or 3.6%, below the five-year average. The bulk of stock-build came mainly from crude,
while products saw a slight build.
European crude inventories rose by 1.0 mb in May following a build for the last five
months and ended May at 461.1 mb, which is the highest level since November 2012.
This represents a surplus of 5.0 mb, or 1.1%, above the year before, but is still
13.2 mb, or 2.8%, below the latest five-year average. The increase in crude oil stocks
came on lower crude runs, which fell by almost 200,000 b/d to stand bellow 10 mb/d.
At this level, crude throughput was also around 350,000 b/d lower than the same time
a year ago. In May, European refiners cut average utilisation rates by one percentage
point to 79%. Shortfall in the output from the UK’s Buzzard field early in May limited
further build in crude oil inventories.
Product stocks in Europe saw a slight build of 0.1 mb in May, ending the month at
614.6 mb. This level represented a surplus of 16.2 mb, or 2.7%, over the same period
last year. They remained some 26.8 mb, or 4.2%, below the five-year average. Within
products, the picture was mixed: distillate and residual fuel oil saw builds, while
gasoline and naphtha witnessed draws.
Gasoline stocks fell by 1.1 mb in May after dropping by 3.9 mb in April to stand at
112.4 mb. Despite this stock-draw, they represent a surplus of 6.2 mb or 5.8% over a
year ago, but they are still 1.9 mb or 1.7% below the five-year average. Lower gasoline
production was the main reason behind the decrease in gasoline stocks, however
continued weaker demand in the region limited further gasoline stock-draws.
Distillate stocks rose by 1.1 mb, reversing the fall of the last two months and ended
the month of May at 387.4 mb. With this build, the surplus with last year has widened
to 2.3% from 1.1% a month earlier. However, the deficit with the seasonal norm
remained at 2.1 mb or 0.6%. The stock draw reflected mainly lower gasoline imports
from Russia combined with some relative improvement in demand in the region. Lower
refinery output limited further stock builds in distillate inventories.
Residual fuel oil stocks also saw a build of 0.5 mb, reversing the drop of last month
and ended May at 86.7 mb. This build helped inventories to switch the deficit of the
previous month to a surplus of 4.4%. But they still remained at 20.0 mb or 18.8%
below the seasonal average. The build in residual fuel oil stocks came on the back of
lower bunker fuel demand. Higher exports to the region also contributed to the build in
fuel oil stocks. Naphtha stocks fell by 0.4 mb to end May at 28.2 mb, and stood 2.3 mb,
or 7.5%, below the same period last year and 2.7 mb, or 8.7%, lower than the five-year
average.
US
Preliminary data for June shows that US total commercial oil stocks rose by 14.2 mb
for the fourth consecutive month, accumulating almost 35 mb since March. At
1,129.3 mb, inventories stood at 16.9 mb or 1.5% above last year at the same time and
indicated a gain of 48.2 mb or 4.2% over the five-year average. The stock-build was
attributed to products, which increased by 21.7 mb, while crude abated this build,
declining by 7.5 mb.
US commercial crude stocks fell by 7.5 mb for the second month to end the month of
June at 383.3 mb. Despite this drop, US crude oil commercial stocks finished the
month at 33.8 mb or 9.7% above the five-year average, while they stood at 2.2 mb or
0.6% lower than a year ago at the same time.
The total of the stock draw in US crude came during the week ending 28 June, driven
by the fall in crude oil imports over the previous week, which declined by almost
900,000 b/d to average 7.4 mb/d. Over the whole month of June, crude oil imports
averaged 7.9 mb/d, which were 1.1 mb/d below the same period last year. Increased
refinery inputs in June have also contributed to the drop in crude oil stocks. Indeed, US
crude oil refinery inputs rose by almost 400,000 b/d to average 15.6 mb/d, almost at
the same level as last year. In June, US refineries operated at around 89.8%, which
was 2.6 percentage points (pp) higher than in May, but still 2.3 pp less than last year at
the same time. It should be highlighted that during the week ending 28 June, US crude
oil refinery inputs reached 16.1 mb/d, the highest since mid-June 2006 and almost
400,000 b/d more than the previous week. This corresponds to a refinery utilisation
rate of 92.2% of total capacity. Inventories in Cushing also fell by around 1.0 mb in
June from the previous month to stand at 49.6 mb.
Total product stocks rose in June, following a build of the last two months to stand at
745.6 mb. With this build, product inventories widened the surplus with a year ago to
19.2 mb from 11.2 mb a month earlier. Compared to the seasonal average, product
stocks stood at 14.4 mb or 2.0% above the five-year average. With the expectation of
distillate, all other products saw a build, with the bulk of the increase coming from
unfinished products and propylene.
Gasoline stocks rose by 4.9 mb, reversing the drop of the last fourth months and
ended June at 223.7 mb. With this build, gasoline stocks stood at 16.0 mb or 7.7%
above a year ago, and 11.2 mb or 5.3% higher than the seasonal average. The build in
gasoline stocks was driven mainly by higher gasoline production, which increased by
nearly 100,000 b/d to average 9.2 mb/d. However, higher gasoline demand limited a
further build in gasoline stocks.
In contrast, distillate stocks fell by 2.5 mb, reversing the build of the last month and
ended June at 120.8 mb. Despite this drop, distillate stocks indicate a gain of 0.7%
over a year ago at the same time, while they still remained 20.4 mb or 14.5% less than
the five-year average. Higher demand, which increased by around 270,000 b/d to
average 4.1 mb/d, was behind the drop in distillate stocks. The slight increase in
distillate production limited a further drop in distillate inventories.
Residual fuel oil stocks rose by 1.0 mb to finish the month of June at 38.0 mb. At this
level, they were 0.7 mb or 0.6% higher than a year ago but indicated a deficit of 1.0 mb
or 2.5% over the seasonal norm. Jet fuel stocks also increased by 0.7 mb in June to
stand at 39.8 mb and remained at 1.4 mb or 3.5% higher than the same month a year
ago, but stood at 2.2 mb or 5.3% below the latest five-year average.
Japan
In May, total commercial oil stocks in Japan remained unchanged following a build
during last two months and ended the month at 169.4 mb. As this level, they are
7.6 mb or 4.3% below a year ago at the same period, and they stood at 8.7 mb or
4.9% lower than the last five-year average. Within the components, crude saw a build
of 2.3 mb in May, while products fell by almost the same amount.
Japanese commercial crude oil stocks saw a build of 2.3 mb in May for the third
consecutive month to stand at 101.4 mb. Despite this build, they are still 6.1 mb or
5.7% below a year ago at the same time and 3.2 mb or 3.0% below the five-year
average. The build in crude oil stocks in May was driven by lower crude throughputs.
Indeed, crude inputs to refinery declined by 386,000 b/d to average 3.1 mb/d. In May,
Japan’s refineries were running at 69%, around 8.6 pp lower than in the previous
month and 1.4 pp less than the same period last year. The decline in crude imports,
which fell by around 309,000 b/d or 8.4%, averaging 3.4 mb/d, limited a further buld in
stocks. At this level, they are also 5.4% lower than May 2012 Direct crude burning in
power plants rose in April by 21.0% to end the month of May at around 235,507 b/d,
but this is almost 24% less than the same period last year.
On the product side, Japan’s total product inventories saw a drop of 2.3 mb,
reversing the build of last month and ended May at 68.0 mb. At this level, they
indicated a deficit of 1.5 mb or 2.1% with a year ago and they are 5.6 mb or 7.6%
lower than the five-year average. The decline of 6.2% in refinery output in May was
behind the decline in product stocks, however, lower Japanese total oil product sales,
which fell by 6.6% from a month earlier to average of 3.1 mb/d, limited a further drop in
product stocks. Within products, the picture was mixed: distillates and residual fuel oil
saw a decrease, while naphtha witnessed builds. Gasoline stocks remained
unchanged in May from the previous month.
Distillate stocks fell by 2.1 mb, ending the month of May at 27.5 mb. At this level, they
are 2.3 mb or 7.6% below a year ago and 3.0 mb or 9.9% above the seasonal
average. Within distillate components, jet fuel oil and gasoil stocks fell, while kerosene stocks went up.
Kerosene inventories rose by 1.9% driven by lower domestic sales, which declined by
almost 30%, while lower output limited a further build in kerosene stocks.
Jet fuel fell by 12% on the back of lower production. Gasoil stocks also fell by 12.2%,
reflecting lower output, which declined by 1.4%. Higher domestic sales also
contributed to the drop in gasoil inventories.
In contrast, naphtha stocks rose by 0.6 mb to finish May at 11.0 mb. At this level, they
represent a surplus of 2.2 mb or 24.8% over a year ago, and 0.3 mb or 3.2% above the
seasonal norm. The build in naphtha stocks came from lower domestic sales as they
declined by 5.7%. The increase of 16% in imports also contributed to this build.
Total residual fuel oil stocks went down by 0.8 mb to end the month of May at
15.3 mb. At this level, they were 9.2% less than a year ago and 14.6% lower than the
five-year average. Fuel oil A inventories fell by 10.2%, while fuel oil B.C fell by 8.6%.
The fall in the two components of fuel oil stocks came on the back of lower outputs.
Gasoline stocks remained unchanged in May, ending the month at 14.3 mb. At this
level, they are 1.0% above the same time last year, but they are still 2.0% less than the
five-year average. Higher production was offset by increasing domestic sales, leading
to an unchanged stock level in May versus April.
Singapore and Amsterdam-Rotterdam-Antwerp (ARA)
At the end of May, product stocks in Singapore reversed the declining trend and
rose by 1.1 mb for the second consecutive month, ending the month at 40.4 mb. This
stock-build indicated a surplus of 2.4 mb, or 6.4%, over a year ago. Within products,
the picture was mixed: fuel oil saw a build, while middle and light distillates witnessed a
drop.
Residual fuel oil rose by 2.2 mb in May following the same build of the previous
month and ended the month at 21.0 mb. With this build, they switched the deficit with
the same month a year ago to a surplus of 0.8 mb. The stock-build was driven by lower
bunker demand in the region after prices rose above $600 per tonne. Higher exports
from the Middle East due to weak demand in China also contributed to the build in
Singapore fuel oil stocks.
Light distillate stocks fell by 0.5 mb for the second consecutive month, ending May at
9.8 mb. Despite this stock-draw, light distillate stocks stood at 0.9 mb or 10.2% above
a year ago at the same period. This stock-draw was driven by higher demand for
gasoline from Malaysia. At the same time, lower imports, especially from India, also
contributed to the fall in light distillate stocks.
Middle distillate stocks also fell by 0.7 mb, reversing the slight build of last month
and finishing the month of May at 9.5 mb. Despite this stock-draw, middle distillate
stocks remained at 0.8 mb or 8.8% above the same period last year. Lower diesel
imports from China and South Korea were behind this stock-draw.
Product stocks in Amsterdam-Rotterdam-Antwerp (ARA) fell by 3.4 mb in May for
the second consecutive month and ended the month at 31.0 mb. This stock-draw
narrowed the surplus over a year ago from 10.3% a month earlier to only 0.1%. Within
products, with the exception of fuel oil, all other products witnessed a drop.
Gasoline stocks fell the most within products as they declined by 2.1 mb to end the
month at 6.4 mb. At this level, gasoline stocks still remained at 0.5 mb or 9.3% higher
than the same period last year. The fall in gasoline stocks reflects mainly higher
gasoline demand during the start of the driving season. Additionally, declining output
during refinery maintenance in Europe also contributed to the fall in gasoline stocks.
Jet fuel stocks saw a slight drop of 0.1 mb to end the month of May at 2.8 mb, but
they remained at 0.5 mb or 21% above a year ago at the same period. Naphtha stocks
also declined by 0.3 mb in May to finish the month at 1.0 mb, standing at 0.1 mb or
12.6% below the level seen at the same time last year. Gasoil fell by 1.2 mb for the
second consecutive month to end the month of May at 15.3 mb, which is 1.6 mb, or
9.6%, lower than a year ago over the same period. The fall in gasoil stocks reflects
partly higher demand as well as the backwardated structure of the forward market,
which limits the incentive to store more gasoil stocks.
In contrast, Residual fuel oil stocks saw a build of 0.3 mb, reversing the draw of last
month and ended May at 5.5 mb. At this level, ARA fuel oil stocks stood at 0.7 mb, or
16%, higher than a year ago over the same period. Higher exports to the ARA hub
were the main drivers behind the build in fuel oil stocks.
