Global crude prices to witness bullish trend as demand in West continue to rise

As per EIA weekly report ending May 28, 2021, US crude oil refinery inputs averaged at 15.6 million barrels per day, which has been 358,000 barrels more compared to previous week's average. Currently, refineries has operated at 88.7 percent of their operable capacity during last week,higher compared to the last week's capacity of 87 percent.

Gasoline production decreased during the last week, averaging 9.6 million barrels per day. Correspondingly, the distillate fuel production has inclined during the last week, averaging at 4.7 million bpd. US crude oil imports are down by 0.6 million to 5.6 million barrels per day during last week. Over the past four weeks, crude oil imports averaged about 6.0 million barrels per day, less by 0,7 percent compared to four-week period of the last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 933,000 barrels per day, and distillate fuel imports averaged 516,000 barrels per day.

US commercial crude oil inventories excluding those in the Strategic Petroleum Reserve reported at 479.3 million barrels, decreased by 5.1 million barrels compared to the previous week's inventories of 484.3 million barrels. At 479.3 million barrels, US crude oil inventories are at the five-year average for this time of the year. The total motor gasoline inventories during the last week has increased by 1.5 million, to a total of 234 million barrels and are about 3 percent above the five-year range. Finished gasoline inventories and blending components both increased during the last week. Correspondingly, distillate fuel inventories has increased by 3.7 million barrels during last week to 132 million barrels and are above 8 percent above than the five year average for this time of the year. Propane/propylene inventories increased by 4.1 million barrels last week to a total of 48.2 million barrels and are 19 percent below the five year average during this time of the year.

Outlook

According to Choice Broking, for the week ahead, they are expecting global prices to witness a bullish trend as the demand in western countries continue to increase with fall in US inventories and American stockpiles. Moreover, with Brent topping $72 a barrel for the first time since 2019, the demand recovery is expected to exceed the OPEC+ supply discipline, overlooking the patchy COVID-19 vaccine rollout around the globe. The Organization of the Petroleum Exporting Countries (OPEC) and allies further added that they would stick to agreed supply restraints. Hence, we are bullish in MCX Crude Futures for the coming week.