Cushing draws surprise

Crude prices remained supported throughout yesterday, despite builds reported by the API survey in the US. Indeed, crude stocks grew by 2.3 mb, while refined products stocks expanded by 1.5 mb. Interestingly, Cushing continued to draw at a fast pace, 3.7 mb, partly explaining the elevated volatility on WTI time spreads. 

In Japan, run rates ticked lower last week, at odds with seasonal operations, at 2.46 mb/d despite the PAJ’s president comments about Japanese refining margins being at sufficient levels to incentivize products exports. Exports to Asia may be a relief for the region, as gasoline prices remained high in the region, and there are reports of diesel rationing in targeted Chinese regions, despite having adequate supplies at a national level by looking at stocks data from Chinese data providers. The PAJ’s president also mentioned utilities asking for fuel oil supplies from refiners ahead of the winter to ensure the security of supply.