U.S. commercial crude oil stocks are expected to show a gain of 3.5 million barrels for the week ended October 25, according to a Platts analysis and survey of oil analysts Monday.

The U.S. Energy Information Administration (EIA) is scheduled to release its weekly data at 10:30 a.m. EDT (1430 GMT) Wednesday.

The directional move in crude oil stocks was in line with the week-over-week change in the EIA five-year average, but that figure was at a much lower level of around 600,000 barrels. The stocks build is expected as U.S. refiners keep crude oil runs at lower levels, while U.S. domestic crude oil production is likely to continue at a higher pace.

Total U.S. refinery utilization fell 0.3 percentage point to 85.9% of capacity for the week ended October 18, 1.3 percentage points below the same week in 2012. Run rates have been limited by ongoing seasonal maintenance.

At the same time, U.S. crude oil production in the lower 48 states rose 468,000 barrels per day (b/d) to 7.9 million b/d for the week ended October 18.

"More than anything, demand is weak," said Phil Flynn, senior analyst at Price Futures Group, who expects crude oil stocks to show a 3 million-barrel increase for the week ended October 25.

Total petroleum implied demand* for the week ended October 18 fell 721,000 b/d to 18.27 million b/d. The decline put implied demand some 867,000 b/d below levels seen for the same week in 2012.

Flynn also noted upsets at refineries that could impact crude oil supplies.

Citgo's 167,000 b/d Lemont, Illinois, refinery shut its crude oil distillation unit following an October 23 fire. More than 50% of the Lemont refinery's crude oil slate is made up of Canadian heavy sour grades.

Valero's 100,000 b/d Three Rivers, Texas, refinery lost power on October 21, which was later restored. The refinery has a fluid catalytic cracker under seasonal turnaround that began in early October and is expected to last six weeks.

Not all analysts are expecting a build in crude oil stocks.

Carl Larry, president of Oil Outlooks, estimates crude oil stocks will fall 1.75 million barrels, anticipating a ramp-up in run rates from U.S. Gulf Coast (USGC) refiners.

"That should increase some production, but more importantly start to mop up the excess crude supply," Larry said.

In addition, Larry expects "some crude will get nominated for the Keystone XL pipeline. It should be up and running and we think that crude will be allocated this week."

Overall, U.S. refinery run utilization rates are expected to be near flat, rising only 0.1 percentage point to 86% of capacity.

GASOLINE STOCKS EXPECTED TO BUILD, DISTILLATES TO DECLINE

U.S. gasoline stocks are expected to show a build of 1.5 million barrels for the week ended October 25 on continued weak demand.

"We are going to see a small rise in production as Gulf refineries pick up where they left off, but the build will help temper prices," Larry said.

EIA data showed U.S. gasoline stocks fell a larger-than-expected 1.81 million barrels for the week ended October 18, led by a 2.23-million-barrel draw in USGC inventories.

During that week, implied demand for gasoline fell 280,000 b/d to 8.8 million b/d. Still, that was some 303,000 b/d above implied demand for the same reporting week in 2012.

Citgo cutting throughput at Lemont due to the fire there could temper a build in gasoline stocks.

U.S. distillate stocks could decline 1.2 million barrels, according to analysts.

Larry, who forecast a 1.5-million-barrel build in distillate stocks, said that while production would increase if refinery runs moved higher, he was skeptical about a demand increase.

"It's a bit of a tossup if we bounce back on exports, but we think this is still another week away," he said.