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US commercial crude stocks skyrocketed last week as refinery activity plunged and net imports surged. Strategists at Capital Economics expect stocks to rise a bit further in the coming weeks as refinery throughput remains constrained.

See:  Brent  Oil  is on the way to the 2020 high at $71.75 – Credit Suisse

Key quotes

“The EIA’s weekly US Petroleum Report estimates that crude oil in commercial storage ballooned by a record 21.6 M barrels last week. This was much larger than the 7.4 M barrel increase reported by the American Petroleum Institute (API). Stocks are now once again firmly above their five-year average.

“The main factor behind the increase in crude stocks was the sharp decline in crude inputs to refineries. Refinery throughput plummeted by 2.3 M bpd to just 9.9 M bpd, the lowest level since records began in 1982, owing to the ongoing freezing weather-related disruption in the southern parts of the country. Temperatures have increased in the past week or so, but we still expect refinery activity to remain constrained for some time as maintenance takes place.”

“The partial easing of quarantine measures and the warmer weather has supported road travel activity. We expect that gasoline stocks will rise further in the next few weeks as demand continues to revive as the virus is brought under control and as refinery throughput remains soft.”