On the surface this weeks stocks numbers are alarming as they are not only high but have increased week over week. We want to take a deeper dive into this weeks stocks numbers. The first thing that stands out to us is the draw in the Gulf Coast. This is an export hub and tends to be indicative of gallons leaving the States when draws are present. We also notice a build in stocks both on the East Coast and in the Midwest. We would like to think the build in both spots are indicative of future exports. If the East Coast is building that indicates to us there are gallons waiting to be loaded. If the Midwest is building that indicates to us there are gallons waiting to flow down to the Gulf Coast and ultimately out of the country.
We also note that looking at the absolute numbers in the Midwest, they are quite a bit larger than we have seen over the last two years during the same time period. Historically speaking we are at the upper end of stocks levels in the U.S. Looking at the chart below we also note that this time of year tends to have the highest stocks as we gear up for the summer driving season. The last couple of years have seen larger peaks and valleys as we see it. Keep an eye on the next month or so to see if this pattern repeats itself.
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