Back to top

Analyst Blog

The U.S. Energy Department's weekly inventory release showed that crude stockpiles dropped unexpectedly, as refinery demand strengthened. The report further revealed that within the ‘refined products’ category, gasoline stocks rose, while distillate supplies were down from the week-ago levels.

The Energy Information Administration (EIA) Petroleum Status Report, which contains data of the previous week ending Friday, outlines information regarding the weekly change in petroleum inventories held and produced by the U.S., both locally and abroad.

The report provides an overview of the level of reserves and their movements, thereby helping investors understand the demand/supply dynamics of petroleum products. It is an indicator of current oil prices and volatility that affect businesses of companies engaged in the oil and refining industry, such as ExxonMobil Corp. (XOM - Analyst Report), Chevron Corp. (CVX - Analyst Report), ConocoPhillips (COP - Analyst Report), Valero Energy Corp. (VLO - Analyst Report) and Tesoro Corp. (TSO - Analyst Report).

Analysis of the Data

Crude Oil: The federal government’s EIA report revealed that crude inventories fell by 482,000 barrels for the week ending September 28, 2012, following a slide of 2.45 million barrels in the previous week.

The analysts surveyed by Platts – the energy information arm of McGraw-Hill Companies Inc. , had expected oil stocks to go up some 1.5 million barrels. An uptick in refinery utilization rates led to the surprise stockpile drawdown with the world's biggest oil consumer even as imports rose.

However, crude inventories at the Cushing terminal in Oklahoma – the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange – edged up by 135,000 barrels from the previous week’s level to 43.87 million barrels. Stocks are currently just under the all-time high of 47.78 million barrels reached in June.

At 364.70 million barrels, current crude supplies are 8.4% above the year-earlier level, and exceeds the upper limit of the average for this time of the year. The crude supply cover was down from 25.0 days in the previous week to 24.8 days. In the year-ago period, the supply cover was 22.2 days.

Gasoline: Supplies of gasoline were up for the first time in 10 weeks as domestic consumption tumbled, while production and imports rose.

The 114,000 barrels addition – compared to analyst projections for an unchanged supply level – took gasoline stockpiles up to 195.94 million barrels. As a result of this increase, the existing inventory level of the most widely used petroleum product is now 8.3% off the year-earlier levels and is in the lower limit of the average range.

Distillate: Distillate fuel supplies (including diesel and heating oil) dropped by 3.69 million barrels last week, much higher than analyst expectations for a 400,000 decrease in inventory level. The fall in distillate fuel stocks – the third in as many weeks – could be attributed to stronger demand and lower imports.

At 124.06 million barrels, distillate supplies are 20.9% below the year-ago level and are near the lower limit of the average range for this time of the year.

Refinery Rates: Refinery utilization was up 0.8% from the prior week to 88.2%. The analysts were expecting the refinery run rate to remain unchanged.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
PLANAR SYST… PLNR 4.44 +5.21%
BITAUTO HOL… BITA 81.71 +5.12%
CTPARTNERS… CTP 16.66 +4.26%
CHINA BIOLO… CBPO 47.91 +3.30%
MALLINCKROD… MNK 72.94 +2.85%