The U.S. Energy Department's weekly inventory release showed that crude stockpiles increased for the third week in a row, as imports climbed. The report further revealed that within the ‘refined products’ category, gasoline stocks rose, while distillate supplies were down from the week-ago levels. Meanwhile, refiners scaled back their utilization rates by 0.2%.
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 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 jumped by 5.90 million barrels for the week ending October 19, 2012, following a climb of 2.86 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 1.7 million barrels. A surge in the level of imports led to the stockpile build-up with the world's biggest oil consumer.
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 – edged up by 40,000 barrels from the previous week’s level to 44.07 million barrels. Stocks are currently just under the all-time high of 47.78 million barrels reached in June.
At 375.13 million barrels, current crude supplies are 11.1% above the year-earlier level, and exceeds 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 25.3 days. In the year-ago period, the supply cover was 23.0 days.
Gasoline: Supplies of gasoline were up for the second consecutive week, as domestic consumption tumbled. This was partially offset by falling imports and production.
The 1.44 million barrels gain – contrary to analyst projections for a decline in supply level – took gasoline stockpiles up to 198.57 million barrels. However, notwithstanding this build, the existing inventory level of the most widely used petroleum product is still 3.1% 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 646,000 barrels last week, much lower than analyst expectations for a 1.5 million barrels decrease in inventory level. The marginal fall in distillate fuel stocks – the sixth in as many weeks – could be attributed to lower imports and production, partially offset by weaker demand.
At 118.02 million barrels, distillate supplies are 18.9% below the year-ago level and are under the lower limit of the average range for this time of the year.
Refinery Rates: Refinery utilization was down 0.2% from the prior week to 87.2%. The analysts were expecting the refinery run rate to decline by 0.4%.