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US Crude Oil Inventories Expected to Fall

According to an S&P Global Platts estimate released on June 28, US Crude Oil inventory draws likely increased in the week ending June 25 due to growing refinery demand. According to analysts polled by Platts, total commercial Crude Oil stocks are estimated to have decreased by 4.7 million barrels to roughly 454.4 million barrels. The decrease would reduce stockpiles to their lowest level since March 2020, putting them 6.3 percent behind the five-year average of US Energy Information Administration data, the worst gap since August 2008.

Analysts predict refinery utilization to have risen to 92.9 percent of capacity in the week ending June 25, up 0.7 percentage point from the previous week and the highest since early January 2020. Last week, refinery margins improved, with US Gulf Coast WTI MEH cracking margins averaging $11.86/b in the five days ending June 24, up from $10.63/b the week before.

US Crude Oil Inventories Expected to FallStrong refined product demand most certainly aided refinery profitability. According to the US Transportation Security Administration data, approximately 2 million travelers passed through checkpoints every day last week, up 4% from the week before and more than 250% more than year-ago levels.

According to Apple Mobility statistics, US driving activity averaged 162 percent of the baseline in January 2020, down roughly one percentage point from the index’s previous high of 163.5 percent the week before. Ridership on public transportation increased by almost 1% to 96 percent of baseline, the highest level since early March 2020. According to S&P Global Platts Analytics data, total refinery net Crude Oil demand is projected to have averaged 16.35 million b/d in the week ending June 25, up from an EIA-reported 16.11 million b/d the week before, according to S&P Global Platts Analytics data.

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