The Platts pre-report analyst survey of EIA/API estimates suggests a 1.6-million-barrel build in US crude oil stocks

Platts Survey of Analysts

• Crude oil stocks up 1.6 million barrels
• Gasoline stocks down 1.26 million barrels
• Distillates stocks up 1 million barrels
• Refinery utilization, or run rate, up 0.11 percentage point to 84.61%

New York - April 12, 2010

This week's data from the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA) will likely show a commercial crude oil inventory build of 1.60 million barrels for the week ending April 9, analysts polled by Platts said Monday.

API is scheduled to release its data at 4:30 p.m. ET (2130 GMT) Tuesday. EIA's report will be released at 10:30 a.m. ET (1530 GMT) Wednesday.

Another build would keep crude stocks on an uptrend seen since January. Between the week ending January 22 and April 2, U.S. crude oil stocks have climbed to 356.165 million barrels from 326.677 million barrels, according to the EIA.

Analysts are looking for continued strong imports to drive stocks higher, although they say an increase in refinery utilization would minimize the stock build.

"[W]e feel that utilization and crude oil imports are two of the most important figures we will get from this week's statistics," Cameron Hanover analysts said in a report. "Crude oil imports have increased substantially over the last few weeks, and the need to do something with the extra crude has put refiners in a tough position."

The extra crude "must be laid into storage or processed. Either course of action has potentially bearish ramifications."

U.S. crude imports have risen to 9.561 million barrels per day (b/d) the week ending April 2 from 8.428 million b/d the week ending March 12, according to the EIA.

"Crude supplies are expected to show a modest increase largely as a result of an expected rebound in imports into the West Coast region," independent analyst Jim Ritterbusch said in a report. For the week ending April 2, West Coast crude imports fell to 924,000 b/d from 1.28 million b/d.

Analysts polled by Platts expect refinery utilization to climb 0.11 percentage point to 84.61% of capacity.

Ritterbusch said he expects stocks at Cushing, Oklahoma—home of the New York Mercantile Exchange (NYMEX) light sweet crude oil futures contract delivery point—to build around 500,000 to 700,000 barrels. Cushing stocks have been on the rise for three weeks, climbing 1.25 million barrels between March 12 and April 2 to 31.164 million barrels, according to the EIA. Another build would likely be bearish for the NYMEX crude contango, which has widened recently. Contango is the industry vernacular for the condition whereby prices for nearby delivery are lower than prices for future-month delivery. The front-month spread (currently May/June) settled at minus 71 cents per barrel (/b) on April 9, weakening from minus 42 cents/b on March 31.

Analysts anticipate a drop in U.S. gasoline stocks of 1.26 million barrels, following seasonal patterns. Over the past five years, gasoline stocks have fallen roughly 2.9 million barrels for the second week of April, according to the EIA's weekly data. For the most part, gasoline inventories have been falling since mid-February, but the declines have been less pronounced this year, causing the surplus against the five-year average to mount. For the week ending April 2, that surplus stood at 8.777 million barrels, according to the EIA's data, up from 5.796 million barrels the week ending March 12.

Analysts polled by Platts look for a 1-million-barrel build in distillate stocks, following last week's 1.07 million barrel build reported by the EIA. If so, analysts say such a build would cause the surplus against the five-year average to grow to roughly 29.6 million barrels from 27.59 million barrels. # # #

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