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Tight US Fuel Inventories Support Refiners Despite Mixed DOE Data, TPH Says

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US refiners continue to benefit from tight fuel inventories, resilient demand and strong operating rates despite a slightly negative read from the latest US Department of Energy data, TPH Energy Research said in a Thursday note.

The latest DOE data offered a slightly weaker signal for refiners, as distillate inventories showed no draw, contrary to expectations of a 2 million-barrel decline.

Gasoline inventories fell 1 million barrels, broadly matching the 1.1 million-barrel consensus forecast, while refinery utilization came in at 96.2%, slightly above the 96.1% estimate.

Despite mixed weekly data, distillate inventories reached a new five-year low, 11.5% below the five-year average, while gasoline stocks also hit a five-year low, 5.9% below the average.

The tightest regional balances remain in Petroleum Administration for Defense Districts 1 and 5, which could benefit PBF Energy (PBF), Phillips 66 (PSX) and Valero Energy (VLO), TPH said.

Fuel demand has held up despite higher prices, with gasoline demand down 0.5% over the year, while distillate and jet fuel demand increased 1.9% and 3.8%, respectively.

US light-product demand has now grown over the year for four consecutive weeks after weaker readings in early July, according to the note.

US refiners are maintaining high operating rates to benefit from strong margins, with quarter-to-date utilization 3.1 percentage points above the five-year average, up from 1.9 percentage points in Q2, TPH said.

Price: $72.44, Change: $+2.10, Percent Change: +2.99%

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