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U.S. Gasoline & Distillates Stocks Up, Cushing Supplies Slump

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Oil prices edged down 0.6% on Thursday, extending losses from a 0.8% drop the previous session amid fears of a global economic slowdown and a report from the U.S. government showing a surprise increase in fuel stockpiles. 

Analysis of the EIA Data

Crude Oil: The federal government’s EIA report revealed that crude inventories fell by 2.7 million barrels for the week ending Aug 16, compared to the 3.1 million barrels drawdown that energy analysts had expected. While lower than anticipated, supplies fell for the first time in three weeks. Higher refinery crude runs and decrease in imports largely drove the stockpile decline with the world's biggest oil consumer. This puts the total domestic stocks at 437.8 million barrels – 7.2% above the year-ago figure and 2% over the five-year average.

Meanwhile, oil prices drew some support from stockpile draw at the Cushing terminal in Oklahoma. The key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange saw inventories decline 2.5 million barrels to 42.3 million barrels – the lowest since February.   

The crude supply cover was down from 25.5 days in the previous week to 25.1 days. In the year-ago period, the supply cover was 23 days.

Turning to products, and it is a fairly bearish story.

Gasoline: Gasoline supplies edged up 312,000 barrels as demand for the fuel decreased by 306,000 barrels per day to 9.63 million barrels per day. Analysts had forecast 1.6 million barrels decline. At 234.1 million barrels, the current stock of the most widely used petroleum product is unchanged from the year-earlier level but exceeds the five-year average range by 4%.

Distillate: Distillate fuel supplies (including diesel and heating oil) rose 2.6 million barrels last week on higher production and slightly lower demand, while analysts were looking for an inventory draw of 200,000 barrels. Current supplies – at 138.1 million barrels – are 5.6% higher than the year-ago level though stocks remain 2% below than the five-year average.

Refinery Rates: Refinery utilization was up 1.1% from the prior week to 95.9%.

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 producers, such as Royal Dutch Shell , Chevron (CVX - Free Report) and ConocoPhillips (COP - Free Report) – all carrying Zacks Rank #3 (Hold) – and refiners such as Valero Energy (VLO - Free Report) , Phillips 66 (PSX - Free Report) and Marathon Petroleum (MPC - Free Report) .

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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