U.S. crude maintained trends from the previous week. Crude production is down; storage levels are building, albeit at a slower pace; refineries are slowly ramping up as drivers consume more gasoline; and crude imports and exports both rose slightly. While these trends, reduce the possibility of a storage max-out on balance, it’s too soon to declare victory in the battle against reaching tank top. If a second wave of COVID-19 infections hits the U.S., consumers could respond by scaling back their activities even more. Alternatively, however, they could accept risks as the “new normal” and carry on most activities, albeit at a lower baseline than pre-COVID levels. Gasoline demand could provide early clues about crude demand recovery.

Crude storage builds continue to slow

U.S. weekly stocks of crude oil, excluding the Strategic Petroleum Reserve, total over 532 million barrels, slightly under the record amount of 536 million barrels in storage set in March 2017. The pace of weekly storage inventory injections continues to slow, however, as the most valuable storage locations have already been commercially reserved. Commercial inventory injections rose by 4.6 million barrels for the week ending May 1^st, down from 19.2 million barrels three weeks prior. The SPR continued to receive injections, however, as stocks rose by 1.2 million barrels.