Weekly DOE Oil Chart- December 1, 2017 - Research

Conclusion: Bit of a mixed bag. Overall larger than normal draws, with large crude draws but large gasoline builds. Net imports still at extremely low levels. With net imports closer to normal levels, the US would market would build quite substantially at this point. The interesting thing is that WTI continues to trade at huge discount to MEH (Magellan East Houston Terminal), which means max outflows from Cushing to the USG. At the same time, MEH is trading low enough that crude is exported near maximum levels. Brent keeps trading at a premium despite maximum net exports from the US. Overall we thing the global market will remain in seasonal deficit for the next couple weeks, but high prices will eventually impact demand and cool off the global market a bit.

Total draw of 5mb, 5mb more than normal, large crude draw of 5.6mb, 3.3mb more than normal, but large builds in gasoline of 6.8mb vs 2.8mb seasonal. Cushing drew 2.8mb as the arb toi the USG remained (and remains) open
Implied demand up 0.3mb/d at 20mb/d, slightly above last years levels
Total net imports up 1mb/d but still remains 2.2mb/d below last years levels
Refinery runs up 1.2%, intakes at seasonally record levels
Production increased 25kb/d this week, up 1mb/d year-over-year

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