MOSCOW (MRC) -- U.S. crude oil inventories last week fell to their lowest in nearly three years while gasoline stockpiles rose, the Energy Information Administration said on Wednesday, as the industry continued to recover after Hurricane Ida, said Hydrocarbonprocessing.
Crude inventories fell by 3.5 million barrels in the week to Sept. 17 to 414 million barrels, compared with analysts' expectations in a Reuters poll for a 2.4 million-barrel drop. Inventories now sit at their lowest levels since October 2018, and that tightness, along with strong demand, has helped drive oil prices higher.
Weekly figures on refining activity and oil production showed a return to pre-hurricane activity. Crude production jumped 500,000 barrels per day in the week to 10.6 million bpd, as Gulf offshore facilities resumed operations. Refinery crude runs rose by 960,000 bpd in the last week, with utilization rates up 5.4 percentage points to 87.5% of capacity as refiners restarted key units.
Overall product supplied jumped as a result to 21.1 million bpd, and for the past four weeks, product supplied - a proxy for demand - averaged nearly 21 million bpd, roughly in line with pre-pandemic levels. Overall oil prices were stronger on the day, with U.S. crude up 1.4% to USD71.47 a barrel, while Brent gained 1.4% to USD75.43 a barrel as of 10:47 a.m. ET (1447 GMT).
Undercutting the optimism, U.S. gasoline stocks rose by 3.5 million barrels to 221.6 million barrels, compared with expectations for a 1.1 million-barrel drop. Distillate stockpiles, which include diesel and heating oil, fell by 2.6 million barrels versus expectations for a 1.2 million-barrel drop. Net U.S. crude imports rose last week by 519,000 bpd, the EIA said.
As per MRC, U.S. oil refiners hunting to replace crude lost after a storm hit the U.S. Gulf of Mexico last month have been turning to Iraqi and Canadian oil, while Asian buyers have been pursuing Middle Eastern and Russian grades, analysts and traders said. Royal Dutch Shell, the largest producer in the U.S. Gulf of Mexico, this week said damage from Hurricane Ida to an offshore transfer facility will limit Mars sour crude supplies into early next year. The grade is used heavily by U.S. Gulf refiners and companies in South Korea and China, the top two export destinations for Mars.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.
MRC