Macquarie Calls Crude Build as German Demand Slide Pressures ULSD
Macquarie's U.S. crude build forecast and a 1.9% slide in German first-half energy demand leave ULSD bulls with limited support.
Macquarie strategists, in a report sent to Rigzone on Wednesday (2026-08-05), forecast a U.S. crude oil inventory build in the upcoming EIA weekly petroleum status report, a swing from the 7.17 million barrel draw recorded the prior week. NYMEX ULSD front-month sat at $3.80 a gallon as of Wednesday (2026-08-05), up 0.53% on the day. The demand evidence needed to carry prices higher is deteriorating.3,2
The prior crude draw, which covered the week ending July 24 (2026), pushed U.S. commercial crude stocks to 404.5 million barrels, down from 411.7 million barrels the week before and well below the 426.7 million barrels recorded at the same point in 2025, Rigzone reported. That draw was powered by U.S. refinery utilization reaching 97.2% of capacity and throughput of 17.3 million barrels daily, FXEmpire reported on Tuesday (2026-08-04). Refineries running at near-maximum rates produce large volumes of product. Sustaining those volumes requires consistent demand to clear the barrels.3,2
But Macquarie sees crude now building. The strategists attribute the expected swing to a bounce-back in implied domestic supply (production, adjustments, and transfers) of 0.9 million barrels per day, and flagged cargo timing as a source of potential volatility in the weekly crude balance. For products, they model draws: gasoline down 2.2 million barrels, distillate lower by 2.0 million barrels, and jet fuel off 0.6 million barrels, with combined implied demand for those three products at roughly 14.8 million barrels per day.3
Germany's half-year data complicates that product demand picture. German energy demand fell 1.9% over the first half of 2026 versus the same period a year earlier, according to preliminary figures published on Tuesday (2026-08-04) by the Working Group on Energy Balances, known as AGEB, an association of German economic and energy research institutes. AGEB attributed the decline to elevated oil and gas prices hitting consumption across industrial and household sectors.1
Germany's consumption figures carry weight for European distillate balances. A decline of nearly 2% over six months, driven explicitly by price response, points to demand destruction rather than a temporary seasonal shift. If that pattern extends into the second half of 2026, it reduces the end-use pull that would otherwise tighten Atlantic basin ULSD balances.1
The Strategic Petroleum Reserve introduces a further supply consideration for the crude complex. SPR stocks stood at 307.7 million barrels on July 29, down from 311.4 million barrels on July 17, and far below the 402.7 million barrels recorded on July 25, 2025, according to Rigzone. U.S. Energy Secretary Chris Wright stated in a posting on the Department of Energy's website on March 11 that the DOE would release 172 million barrels from the SPR as part of an international energy plan. That volume, if executed, would add to crude supply at a moment when Macquarie already sees domestic production bouncing back.3
ICE Brent crude front-month traded at $79.63 a barrel and NYMEX WTI crude front-month at $75.08 a barrel as of Wednesday (2026-08-05), recovering from what FXEmpire described as an unusually sharp two-day price decline that preceded the Tuesday (2026-08-04) session. Both benchmarks gained less than half a percent. ULSD's 0.53% gain on the day tracks that crude recovery.2
The distillate figure in the next EIA report is the concrete test. Macquarie models a 2.0 million barrel draw. A number weaker than that — or a crude build larger than the strategists project — would indicate that 97.2% refinery utilization is producing product at a rate that softening demand in Germany and elsewhere cannot absorb. NYMEX ULSD front-month at $3.80 a gallon leaves little margin for that kind of miss.3,21