US Crude Oil Stockpiles Expected to Rise – Macquarie
Macquarie, a renowned financial services company, has issued new predictions regarding US crude oil inventories. They expect a rise of 5.3 million barrels (also written as MM BBL) for the week ending June 21. This is quite a change compared to the previous week's draw of 2.5 million barrels.
Expectations for Crude Inventories
In simpler terms, the total amount of crude oil stored in the US is expected to increase. This suggests that the US is holding more crude oil than expected. Macquarie's strategy note explains that the US crude balance—or the amount of oil available—might be more abundant than initially thought.
Factors Influencing the Increase
Refinery Activity
Macquarie's model projects a minor decrease in refinery activity. Refineries are the facilities where crude oil is processed, and reduced activity can impact the overall oil balance.
Net Imports
The report anticipates a significant rise in net imports. Simply put, the US will be getting more crude oil from other countries, while exporting less. For example, there has been a sharp drop in exports by 1.0 million barrels per day (MBD), while imports remained nearly unchanged.
Domestic Supply
Domestic supply, which includes locally produced oil and other adjustments, is expected to see a modest increase by 0.2 MBD.
Strategic Petroleum Reserve (SPR)
The Strategic Petroleum Reserve (SPR), which is a stockpile of emergency crude oil, is also expected to increase by 1.3 million barrels. This reserve acts like a savings account for crude oil, used only in emergencies.
Focus on Specific Locations: Cushing
The small town of Cushing in Oklahoma holds major crude oil storage facilities. The prediction for this area is a draw, meaning a decrease in stored oil, by 0.7 million barrels.
Product Inventories
Here's what to expect for other oil products:
- Gasoline: A draw of 1.3 million barrels, meaning a decrease.
- Distillate (heating oil and diesel): An increase of 1.4 million barrels.
- Jet Fuel: An increase of 1.5 million barrels.
These changes indicate how different types of oil products are being used or stored.
Implied Demand
Macquarie forecasts an implied demand—the total use of these products—to be 14.4 million barrels per day (MBD) for the week. This measurement helps understand how much of these products are consumed.
Conclusion
In summary, Macquarie expects US crude oil storage to rise by 5.3 million barrels for the week ending June 21. Multiple factors, such as decreased refinery runs and increased imports, play a role in this change. Keep an eye on regions like Cushing and different products like gasoline, distillates, and jet fuel to understand the broader impact.
Understanding these terms and data helps in grasping the larger picture of the oil market dynamics and how they can influence prices and availability.
