US crude stocks decline five weeks in a row

US crude stocks extended their string of declines to five weeks running last week. Total stocks fell by slightly more than 2m bbl last week and gasoline stockpiles also dropped. Total petroleum inventories (crude and products) were down by 400k bbl last week, unwinding little of the more than 10m bbl gain recorded last week. Production is holding steady at 11m b/d and we will be watching the outlook for US production closely as producers come up against infrastructure constraints.

US crude stocks in a downward cycle

Source: EIKON, Emirates NBD Research

In recognition of the growing scale of US crude exports (over 2.36m b/d last week) price reporting agencies are now inching closer to including WTI delivered into Europe as a part of the Brent assessment. The crudes underpinning the Brent market are in a long term decline whereas the outlook for WTI remains enormously strong, even if near terms risks are for a slowdown in growth.

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