New York—RBOB futures fell sharply March 17 amid an unexpected build in US gasoline inventories.
NYMEX April RBOB settled 5.41 cents lower at $2.0471/gal and April ULSD declined 2.66 cents to $1.9061/gal.Total US gasoline stocks edged 470,000 barrels higher to 232.08 million barrels in the week ended March 12, US Energy Information Administration data showed March 17, leaving stocks 5% behind the five-year average, in from a deficit of 6.4% the week prior.
American Petroleum Institute data released late March 16 had called for a 926,000 barrel gasoline draw for the week ended March 12, while analysts surveyed March 15 by S&P Global Platts had pointed to a 1.4 million barrel decline over the same period.
The March 17 settlement was the lowest for front-month RBOB since March 8 and was more than 10 cents below its recent peak of $2.15/gal reached on March 12.
The build comes as imports surged to 910,000 b/d, up 58% on the week and the strongest since the week-ended Aug. 7. The bulk of these imports—710,000 b/d—landed on the high-demand US Atlantic Coast, which is structurally short of gasoline.
But this import surge failed to prevent a pull from USAC gasoline stocks, which declined 620,000 barrels to 63.07 million barrels. Instead, the nationwide inventory build was concentrated on the US Gulf Coast and in the Midwest, which saw counter-seasonal increases of 770,000 barrels and 750,000 barrels, respectively.
The front-month ICE New York Harbor RBOB crack versus Brent fell to $17.86/b in afternoon trading, on pace for the lowest close since March 8.
Gasoline stocks were further padded by a 440,000 b/d increase in production to 9.12 million b/d, an 18-week high.
This increase came from a continued recovery in US refinery runs last week. Total refinery net crude inputs were up 9% from the week prior at 13.43 million b/d as utilization jumped 7.1 percentage points to 76.1% of total capacity. Notably, at these levels crude inputs were still 9% behind where they were the week prior to the February deep freeze and utilization was still 7 percentage points below pre-storm levels.
NYMEX April WTI settled 20 cents lower at $64.60/b and ICE May Brent declined 39 cents to $68.00/b.
US commercial crude stocks climbed 2.4 million barrels last week to 500.8 million barrels, EIA said. The counter-seasonal build pushed inventories nearly 7% above the five-year average, opening the widest surplus since the week ended Jan. 15.
Against this rising supply, global crude demand outlooks remained under pressure amid signs of slowing progress against the coronavirus pandemic in Europe. Several European countries have suspended Oxford-AstraZeneca vaccinations on concerns about potential side effects.
"The suspension will not do the bloc's economic and fuel recovery any favors," PVM analysts said in a morning note. "Europe's medicines watchdog was quick to play down concerns that the jab is the cause of reported blood clots. The hope now is that Europe can get its sluggish vaccine rollout back on track."
The World Health Organization March 17 said the benefits of the vaccine outweigh the risks and recommended vaccinations resume.
Despite these headwinds, the International Energy Agency raised its near-term global oil demand outlook March 17, citing expectations that the global rollout of COVID-19 vaccines would trigger a sharp rebound in economic growth despite hopes of curbing oil use by switching to cleaner sources of energy.
Overall, the IEA said it now sees global oil demand rising 3.5 million b/d between 2019 and 2025, up from a growth estimate of 2.8 million b/d in October.
