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S&P Global Platts Reports Expect Uptick in Refinery Runs

According to an S&P Global Platts report released on April 26, US crude oil inventory draws likely resumed during the week ending April 23 due to expected increases in refinery demand. Polls by Platts’ analysts show total commercial crude oil stocks would drop by 200,000 barrels to about 492.8 million barrels. The draw will reduce the supply overhang to 0.6 percent, the lowest level since early February, according to the US Energy Information Administration’s five-year average results.

The draw comes despite a 0.3 percentage point increase in refinery utilization to about 85.3 percent of total capacity, which is around 1% below the five-year average and the lowest since the week ended February 28th, 2020. Though utilization remained stable, the EIA announced an unexpected drop in refinery crude runs for the week ending April 16.

However, according to S&P Global Platts Analytics numbers, runs are expected to increase again this week, averaging around 14.99 million b/d. This will put them about 5% behind the five-year average, the smallest gap since the week ending March 20, 2020. Last week, refinery margins fell again, contributing to the headwinds facing a continued recovery in refinery demand.

WTI MEH cracking margins on the US Gulf Coast averaged $12.51/b in the five days ended April 22, according to Platts Analytics results, down from $13.15/b in April. Weaker gasoline cracks were a major factor in the downturn. Last week, the USGC unleaded 87 cracks versus WTI MEH averaged about $19.11/b, down from $19.95/b in April. Analysts expect total gasoline stocks in the United States to remain unchanged from the previous week, at about 235 million barrels.

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