US crude stockpiles are expected to have risen by close to 2 million barrels last week, a Reuters poll shows, even as early industry data pointed to a draw of about 2 million barrels. Wednesday's EIA report will settle the question, with refinery runs and diesel stocks also in focus.
Traders face conflicting signals ahead of Wednesday's US government inventory report. Analysts polled by Reuters expect crude stocks to have risen by close to 2 million barrels in the week to October 2, roughly in line with the five-year average. Gasoline stocks are seen falling by a similar amount, while distillate stocks are expected to drop by about 2 million barrels.
But the American Petroleum Institute's figures, released after Tuesday's settlement, point the other way. According to market sources, the API reported a crude draw of about 2 million barrels, against expectations for a build. Gasoline stocks fell by about 1.4 million barrels in the API data, while distillates rose by roughly 460,000 barrels. The API survey is voluntary and often diverges from the government's own count, due at 10:30 am ET on Wednesday.
Last week's surprise still hangs over the market
The previous week's official data already wrong-footed traders. Crude stocks rose by about 900,000 barrels to around 427 million, when analysts had expected a small draw.
Refinery utilisation is expected to have slipped slightly from about 92.5% of capacity. Utilisation links the crude and product numbers — when refiners run less, they buy less crude, which tends to push crude stocks up and product stocks down. That is the pattern analysts expect this week.
Diesel markets are watching distillates closely
Distillates, covering diesel and heating oil, are especially closely watched because diesel prices are at record highs. A draw would suggest the shortage is not yet easing, while an unexpected build could offer some relief. Markets tend to react less to the size of a build or draw than to the gap against forecasts, so even a smaller-than-expected build could support prices.
The key question for Wednesday is whether the EIA confirms the API's crude draw or the analysts' expected build. For product markets, the distillate figure matters most, with emergency stock releases being organised as diesel inventories stay in focus.
Source: investingLive
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