Are US Distillate Inventories Bearish for Oil Prices?
US distillate inventories
US distillate inventories rose by 1,667,000 barrels or 1.3% to 129.4 MMbbls (million barrels) on November 24–December 1, 2017. However, inventories fell by 27.2 MMbbls or 17.4% from the same period in 2016.
Wall Street analysts estimated that US distillate inventories would have risen by 0.9 MMbbls on November 24–December 1, 2017. A larger-than-expected rise in distillate inventories weighed on US diesel and oil (USO) (USL) prices on December 6, 2017. US diesel futures fell 2.7% to $1.86 per gallon on the same day.
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US distillate production and demand
US distillate production rose by 118,000 bpd (barrels per day) or 2.2% to 5.4 MMbpd (million barrels per day) on November 24–December 1, 2017. The production also rose by 319,000 bpd or 6.3% from the same period in 2016.
US distillate demand fell by 145,000 bpd to 3.7 MMbpd on November 24–December 1, 2017. However, the demand rose by 33,000 bpd or 0.9% from the same period in 2016.
US distillate inventories rose for the third straight week. They’re also above their five-year average, which is bearish for diesel and oil (UWT) prices.