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U.S. Crude, Gasoline Supplies Jump

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The U.S. Energy Department's inventory release showed a significant increase in crude stockpiles as refiners scaled down their utilization rates. As it is, the commodity’s stock remains at levels not seen since the 1930s in the face of weak global consumption. What’s more, supplies at the Cushing, Oklahoma storage hub jumped to another record high.

The report further revealed that within the ‘refined products’ category, gasoline stocks rose, while distillate supplies were down from the week-ago level.

Analysis of the Data

Crude Oil: The federal government’s EIA report revealed that crude inventories increased by 3.98 million barrels for the week ending Jan 15, 2016, following a marginal rise of 234,000 barrels in the previous week.

The analysts surveyed by Platts – the energy information arm of McGraw-Hill Financial Inc. – had expected crude stocks to go up by 2.9 million barrels. A drop in refinery usage and slight uptick in domestic production led to the higher-than-expected stockpile build with the world's biggest oil consumer even as imports fell.

In particular, crude inventories at the Cushing terminal in Oklahoma – the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange – were up 191,000 barrels from the previous week’s level to a record 64.2 million barrels.

Following the third weekly inventory rise in 4 weeks, at 486.54 million barrels, current crude supplies are up 22% from the year-ago period and are near the highest level during this time of the year in 80 years at least.

The crude supply cover was up from 29.2 days in the previous week to 29.5 days. In the year-ago period, the supply cover was 25.0 days.

Gasoline: Supplies of gasoline were up for the tenth time in as many weeks, as production and imports jumped. The 4.56 million barrels surge – much bigger than analysts’ projections for a 1.5 million barrels increase in supply level – took gasoline stockpiles up to 245 million barrels, the highest since 1990. After last week’s build, the existing stock of the most widely used petroleum product is 1.7% higher than the year-earlier level and is comfortably above the upper half of the average range.

Distillate: Distillate fuel supplies (including diesel and heating oil) were down 1.03 million barrels last week, double the analysts’ expectations for a 500,000 barrels fall in inventory level. The decrease in distillate fuel stocks – the first in 4 weeks – could be attributed to stronger demand and lower production. But at 164.53 million barrels, distillate supplies are still 20% above the year-ago level and are near the upper half of the average range for this time of the year.

Refinery Rates: Refinery utilization was down 0.6% from the prior week to 90.6% as domestic facilities remained shut for seasonal maintenance.

About the Weekly Petroleum Status Report

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.

The data from EIA generally acts as a catalyst for crude prices and affect oil and related support plays such as Devon Energy Corp. (DVN - Free Report) , Marathon Oil Corp. (MRO - Free Report) , Transocean Ltd. (RIG - Free Report) , Anadarko Petroleum Corp. , Halliburton Co. (HAL - Free Report) , Chevron Corp. (CVX - Free Report) and ConocoPhillips (COP - Free Report) .

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