Inventories, which have been a bullish surprise to traders, and refining margins, which have been a disappointment, will drive this week’s US cash crude market, traders and analysts said day.

Crude and product stocks were down last week, despite predictions of an increase, and all eyes will be on the US  government’s numbers, an analyst said.
“Traders have been caught leaning the other way,” he said. “Stats will again be a primary feature.”
Refining margins have been improving, but remain relatively weak. Credit Suisse, in its weekly margins report, found signs of optimism but nevertheless recorded declines in four of five regional markets last week.
“They’re starting to look ugly again on sweet crude,” a trader said.
Inventories will influence the trans-Atlantic and time spreads that move differentials, especially what May Brent does against West Texas Intermediate as May Brent expires day, one trader said.
The WTI-Brent spread is relatively narrow, preventing discretionary barrels from moving to the United States, and it may stay narrow as European refinery runs increase this spring, an analyst said.
In that event, crude demand in Europe likely will attract West African barrels that could head to the US Gulf, and both developments will support US cash crude differentials, the analyst said.
On the down side, refinery margins fell, except in the Northeast, Credit Suisse said in its report. Plants in the Midwest had the sharpest drop, $3.30 to $12.54 a barrel.  Gulf Coast margins skidded $1.53 to $12.62, CS said.
Part of the squeeze is a slowing US economy and downward pressure on product demand, which was up 1.8 per cent last week but remained 2.3 per cent below last year on a four-week average basis, Credit Suisse said.
A weekend outage in the Capline pipeline from the US Gulf to the Midwest would be a non-event for markets, traders said.  The line was shut after a crack and small leak were discovered.