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The U.S. Energy Department's weekly inventory release showed that crude stockpiles logged an increase, as refinery demand weakened. 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, containing 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 the businesses of the companies engaged in the oil and refining industry.

Analysis of the Data

Crude Oil: The federal government’s EIA report revealed that crude inventories rose by 2.62 million barrels for the week ending Feb 1, 2013, following a climb of 5.95 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 3 million barrels. A drop in refinery utilization rates led to the stockpile build-up with the world's biggest oil consumer even as imports decreased.

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 – was down 315,000 barrels from the previous week’s level to 51.36 million barrels. Stocks are currently just under the all-time high of 51.86 million barrels reached in January.

At 371.68 million barrels, current crude supplies are 9.6% above the year-earlier level, and comfortably exceed the upper limit of the average for this time of the year. The crude supply cover was up from 25.0 days in the previous week to 25.5 days. In the year-ago period, the supply cover was 23.6 days.

Gasoline: Supplies of gasoline were up for the first time in 3 weeks, as domestic consumption fell and imports rose. This was partially offset by lower production.

The 1.74 million barrels gain – in line with the analysts’ projections – took gasoline stockpiles up to 234.04 million barrels. As a result of this build, the existing inventory level of the most widely used petroleum product is 0.9% higher than the year-earlier level and is in the upper half of the average range.

Distillate: Distillate fuel supplies (including diesel and heating oil) fell 1.04 million barrels last week, higher than the analysts’ expectations for a 750,000 barrels drop in inventory level. The decrease in distillate fuel stocks – the second in as many weeks – could be attributed to sharply lower imports, partially offset by weaker demand and higher production.

At 129.58 million barrels, distillate supplies are 11.6% below the year-ago level and are close to the lower limit of the average range for this time of the year.

Refinery Rates: Refinery utilization was down 0.8% from the prior week to 84.2%. The analysts were expecting the refinery run rate to go down by 0.75%.

Zacks Rank

A bullish data from the EIA generally acts as a positive catalyst for crude prices and buoy producers, such as Exxon Mobil Corp. (XOM - Analyst Report), Chevron Corp. (CVX - Analyst Report) and ConocoPhillips (COP - Analyst Report). With an improvement in the companies’ ability to generate positive earnings surprises, they can then move higher from their current Zacks Rank #3 (Hold).

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