16 August 2018
1 mins clock icon

US refineries running flat out

But production is still showing few signs of slowing down yet

By Edward Bell

oilrefinery10

Despite enormous appetite from refineries in the last week US crude inventories jumped against market expectations. Total crude stocks rose by 6.8m bbl last week, including a gain of 1.6m bbl at Cushing. There were builds across nearly all products expect for a small draw in gasoline. But the real highlight of this week’s EIA report was refinery demand running at 98.1% utilization compared with a five-year average of 90.8% and refinery intake of nearly 18m b/d. Even with refineries running flat out, production is clearly swamping US oil balances and as part of a broad weakness in commodities yesterday WTI futures fell by over 3%.

Permian still expected to see more output gains even as pricing remains weak

Source: EIKON, Emirates NBD Research

Earlier this week the EIA published its Drilling Productivity Report where it expects further increases in production in all shale basins for September. Total shale production will hit 7.5m b/d next month, nearly 70% of total US output. The Permian basin alone will provide 3.4m b/d even with physical pricing still remaining at a sharp discount to WTI (USD 17/b overnight).

Click here to download the full chartpack

Written By

Edward Bell Head of Market Economics


There was an error during your feedback!

Your feedback is valuable to us and will help us improve.

More from Edward Bell

Related Articles

Subscribe to our newsletter and stay updated on the markets

There was an error during your newsletter subscription!

Please try again to stay updated with all the latest financial news and valuable insights.

Thank you for newsletter subscription!

To stay updated with all the latest financial news and valuable insights.