US asphalt inventories reached record-highs over the past two weeks.
Asphalt inventories started off the new year rising by 3.6pc over the week to 26.4mn bls for the week ending 6 January, according to Energy Information Administration (EIA) data. This was the highest level for asphalt inventories the first week of the year in data going back to 2011.
Asphalt inventories ended 2022 on a high note as well, reaching 25.5mn bl the week ending 30 December — also the highest levels for that week since 2010.
Current asphalt levels are 9.4pc above the five-year average of 24.2mn bl and were 13pc above the five-year average the last week of December.
Inventories in the US have not been this high since the week ending 19 August when they were at 27.1mn bl. Last year's supply peaked at 33.9mn bl in early April and declined steadily through the paving season, trailing below the five-year range in June.
Rising supply this time of year is not unusual, as many market participants focus on filling inventories and paving activity is minimal across more northern states. But the light-heavy crude spread remains wide, which has incentivized heavier crude runs and additional asphalt production, helping push inventories above historical levels.
Starting in October, the spread between Western Canadian Select (WCS) and WTI prices reached nearly $34/bl, and the differential has held between $25-30/bl since. WTI's premium to WCS dipped below $25/bl for the first time since early October on 10 January.
A late-December cold snap across the southern US has also pressured asphalt demand, which may have supported rising inventories as well.
