US crude stocks climbed 2.4 million barrels in the week that ended September 20 to 419.54 million barrels, as refiners reduced runs heading into the fall maintenance season, US Energy Information Administration data showed Wednesday. Midwest stocks jumped 3.11 million barrels to 125.27 million barrels as refiners reduced operations by 4.4 percentage points to 92.5% of capacity. That figure was down from over 100% of capacity two weeks prior.
Crude inventory builds are typical for this time of year as refiners head into the typical fall maintenance season, which is expected to peak in October. According to S&P Global Platts Analytics, roughly 2.62 million b/d of crude distillation capacity is expected to go offline for maintenance in October, up from 1.52 million b/d in September.
US crude stocks are currently on par with the EIA five-year average, which shows inventories climbing until mid- to late-November, before decreasing again as refiners return from maintenance. US refining margins have strengthened so far this month, which should encourage refiners not undertaking maintenance to maintain high run rates. In the Midwest, the WTI cracking margin has averaged $12.31/b so far in September, up from $10.68/b in August, S&P Global Platts data shows. The US Gulf Coast Mars coking margin has averaged $9.94/b so far in September, up from $7.93/b in August.
Platts margin data reflects the difference between a crude’s netback and its spot price. Netbacks are based on crude yields, which are calculated by applying Platts’ product price assessments to yield formulas designed by Turner, Mason & Co. USGC crude stocks fell 3.38 million barrels last week to 216.55 million barrels, as imports declined 279,000 b/d to 1.36 million b/d, the EIA data showed.
Some of that drop could be storm-related, as Tropical Depression Imelda made landfall in the Houston area last week.