US Oil Demand Is Not As Bad As It Looks

EIA's latest oil storage report may appear mixed on the surface, but we actually found it quite supportive. For starters, US commercial crude storage clocked its first-ever draw for this year at -1.694 million bbls. This was compared to the -3.04 million bbls we had estimated. Our preliminary estimate for next week shows a small build in crude.

Looking at the incoming crude exports out of the US, we think we may have already reached the peak in US crude storage for this year. This is about ~20 million bbls below what we had initially expected.

As US refineries finish up maintenance towards the middle of April, elevated crude exports will be needed to prevent further material builds going forward. If so, the Q1 builds won't be as bad as we had originally expected.