Analysis of U.S. EIA data
New York - March 24, 2010
U.S. crude oil stocks soared 7.245 million barrels to 351.260 million barrels on a jump in imports, despite a rise in refinery runs and crude inputs, data released by the U.S. Energy Information Administration (EIA) for the week ending March 19 showed Wednesday.
The stock build exceeded analyst expectations of a 1.67 million barrel build, and was in line with the American Petroleum Institute's (API) 7.514 million barrel build reported Tuesday. The API and EIA stocks diverge by only 25,000 barrels with the API reporting total stocks at 351.51 million barrels as of March 19.
The surprisingly large build was the eighth consecutive crude build reported by the EIA, from 326.68 million barrels the week ending January 22, which brought stocks only 5,323 barrels short of last year's levels.
The driver behind the build was a 969,000 barrel per day (b/d) climb in imports to 9.397 million b/d, the highest level since the week ending September 25, 2009. Imports were up across the U.S., with the exception of the Midwest. Atlantic Coast (PADD I) imports were up 251,000 b/d to 1.386 million b/d and Gulf Coast (PADD III) imports were up 651,000 b/d at 5.489 million b/d.
In Cushing, Oklahoma -- the delivery point of the New York Mercantile Exchange (NYMEX) crude oil futures contract -- the EIA reported a 600,000 rise in stocks, which should be bearish for NYMEX crude intra-month spreads.
Failing to offset significantly the jump in imports was a rise in refinery utilization rates and crude inputs. The EIA reported a gain of 0.5 percentage point in refinery rates to 81.1%, while crude runs were at 14,042 million b/d, up 102,000 b/d.
U.S. crude inputs currently stand both below last year and the five-year average, but are trending higher toward seasonal averages.
U.S. gasoline stocks plummeted 2.715 million barrels to 224.56 million barrels the week ending March 19, the EIA data showed, exceeding analysts’ expectations. Analysts polled by Platts earlier in the week were looking for a 1.88 million barrel draw.
The large draw should be bullish for NYMEX RBOB futures prices, although an even larger crude stock build was bearish for the entire complex.
Gasoline stocks have been trending lower since mid-February, as is the seasonal norm. Since the week ending February 12, U.S. gasoline stocks have fallen 7.51 million barrels. Over the same period, the surplus above the five-year average has narrowed slightly to 5.94 million barrels from 7.81 million barrels.
A rise in gasoline demand to 9.087 million b/d from 8.849 million b/d contributed to the weekly stock draw, the EIA data showed. On a four-week moving average, demand at 8.953 million b/d was up for the fifth consecutive week.
Gasoline imports inched 15,000 b/d higher to 623,000 b/d, while production climbed 63,000 b/d to 9.024 million b/d. While the RBOB bulls may latch onto the stock draw and demand rise, the bears can point to rising output. Production was well-above the five-year average of 8.488 million b/d, and with refinery utilization rates still low, there is some spare capacity left to bolster output if needed.
The largest stock draw was seen in the Midwest (PADD II), which fell 1.05 million barrels to 55.32 million barrels.
U.S. Atlantic Coast (PADD I) gasoline stocks fell 716,000 barrels to 59.235 million b/d. U.S. West Coast (PADD V) gasoline stocks fell 674,000 barrels to 33.118 million barrels, causing the surplus against the five-year average to narrow to 2.41 million barrels from 3.38 million barrels, the EIA data showed.
U.S. distillate stocks fell 2.42 million barrels to 145.69 million barrels, continuing a downward trend started in mid-October. Low sulfur diesel stocks were down 2.7 million barrels at 104.98 million barrels, the EIA data showed.
The draws were seasonal, although analysts polled by Platts were looking for a much smaller 1.25 million barrel distillate decline.
U.S. distillate demand inched higher, to 3.81 million b/d from 3.76 million b/d, but remained well below the five-year average of 4.22 million b/d.
US distillate production fell 466,000 b/d to 2.92 million b/d, contributing to the stock draw, while imports edged up 5,000 b/d to 168,000 b/d.
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