* Refinery runs expected to have fallen 0.9 percentage point * But should still be over 16 million b/d for seventh-straight week * Strong WCS coking margins should keep Canadian imports flowing * Mexican imports could rally amid solid Maya coking economics * Gasoline stocks expected to slide 1.5 million barrels US commercial crude stocks are expected to have fallen 2 million barrels for the reporting week ended August 8, according to a Platts analysis and survey of oil analysts Monday.
The American Petroleum Institute will release its weekly report at 4:30 pm EDT (2030 GMT) Tuesday, and the US Energy Information Administration is scheduled to release its weekly data at 10:30 am EDT Wednesday.
The drop in stocks is expected to be a product of still-strong crude runs, even as analysts expect utilization rates to have fallen by 0.9 percentage point. At 16.39 million b/d for the week ended August 1, a near-1 percentage point drop would still keep runs above 16 million b/d for the seventh-straight week.
Platts data shows a leak in a catalytic light ends unit at ExxonMobil's 584,000 b/d Baytown, Texas, refinery led to a slight production decline last weekend. This impact could be mitigated by the restarting of an FCC at Citgo's 165,000 b/d East Plant refinery in Corpus Christi.
Crude imports, meanwhile, are unlikely to have rallied last week, as both Canadian and Saudi barrels were at the upper range of recent activity for the week ended August 1. US imports of Canadian crude were pegged at 2.78 million b/d, highest in four weeks. Strong coking margins for heavy Canadian grades will likely keep this figure elevated though. US Midwest coking margins for Western Canadian Select hit nearly $27/b Friday, more than $4/b above the 30-day moving average for the grade.
Platts margins reflect the difference between a crude's netback and its spot price. Netbacks are based on crude yields, which are calculated by applying Platts product price assessments to yield formulas designed by Turner, Mason & Co.
Meanwhile, imports of Saudi crude were around 1.23 million b/d, just under this summer's weekly high 1.4 million b/d for the week ended July 11. Most Saudi barrels go on a term basis to the 600,000 b/d Saudi Aramco/Shell joint venture Motiva refinery in Port Arthur, Texas.
That said, if imports were to rally they would likely come from Mexico. Mexican imports were pegged at just 582,000 b/d for the week ended August 1, down from near 1 million b/d the week prior, EIA data shows.
Coking margins for Mexican Maya on the US Gulf Coast averaged just over $9/b last week, in line with the 30-day moving average. However, margins did rise toward the end of the week, hitting $10.52/b Thursday, largely due to stronger product prices.
Platts cFlow ship-tracking software shows one Aframax -- Genmar Daphne -- entered the USGC last week, laden with crude, from Mexico. The ship has a capacity of around 600,000 barrels.
Imports from Nigeria, meanwhile, have been nil for six out of the last seven reporting weeks, according to EIA data. And while cFlow does not show any signs of this having changed last week, relatively strong USGC cracking margins for Nigerian crudes could entice more imports should the economics hold up.
Cracking margins for Bonny Light and Brass River were $9.15/b and $5.88/b Friday -- both above their respective 30-day moving averages. But these numbers are still below comparable domestic grades like Bakken and Louisiana Light Sweet. Bakken cracking margins were more than $11/b Friday, while LLS margins were over $12.50/b. GASOLINE SUPPLY TIGHT
US gasoline stocks are expected to have fallen by 1.5 million barrels last week, according to analysts. At nearly 214 million barrels for the week ended August 1, US gasoline stocks were almost 1 percent below the five-year average of EIA data.
With implied demand pegged at 9.36 million b/d for that same reporting week, some analysts expect the remainder of the summer to be bullish for NYMEX RBOB.
Stocks on the US Atlantic Coast -- home to the New York Harbor-delivered RBOB contract -- are tightening as well. At 58.42 million barrels, stocks are just 2% above the five-year average, but more than 3.2 million barrels below year-ago levels.
Weak prices, both spot and futures, have disincentivized gasoline and blending component imports to the USAC this summer. Imports were pegged at just 412,000 b/d for the week ended August 1, lowest since mid-April and down nearly 42% year-on-year. Front-month RBOB broke below $2.70/gal on August 5, the lowest traded-level since February, when RBOB was in its pre-summer ascendancy.
"The lower prices of gasoline are increasing the demand," Oil Outlooks President Carl Larry said. "We've spent so much time in the past decade talking about demand destruction, it's about time we get on with demand construction. We're into the home stretch of vacation demand that culminates at Labor Day, so retailers are stocking up."
Although cFlow shows no clean cargoes entered the USAC from Europe last week, six tankers, laden or part-laden with clean products, are set to arrive late this week and next week. This could mitigate much of any increased tightness seen with a draw in USAC stocks in this week's data.
Meanwhile, analysts expect US distillate stocks to have increased 250,000 barrels last week. At 124.9 million barrels for the week ended August 1, US distillate stocks are more than 14% below the EIA five-year average.
But inventories often tighten with increased exports. The EIA estimates US distillate exports have been above 1 million b/d for the past seven weeks. The more accurate monthly data for May pegs exports at 1.17 million b/d.
