Analysis of US EIA data: U.S. gasoline stocks build despite demand boost
New York - June 30, 2010
U.S. gasoline stocks rose by a counter-seasonal 537,000 barrels during the week ended June 25 as a rebound in imports and production offset an 11-month high in implied demand*, an analysis of weekly oil data released Wednesday by the Energy Information Administration (EIA) showed. This analysis and commentary is provided by Linda Rafield, Platts senior oil analyst and editor of the weekly Platts Futures and Derivatives Review, a supplement to Platts Oilgram Price Report.
At 218.115 million barrels, gasoline stocks are 7.125 million barrels above the five-year average and 6.877 million barrels above year-ago levels.
Implied gasoline demand rose 221,000 barrels per day (b/d) to 9.462 million b/d last week as product moved through the distribution system ahead of the Fourth of July holiday in the U.S. It is a number not apt to repeat given high levels of unemployment and low levels of consumer confidence.
On a four-week moving average, gasoline demand at 9.309 million b/d was 140,000 b/d above year-ago levels, but 2009 demand provided an abnormally low baseline.
Gasoline production climbed 112,000 b/d to 9.374 million b/d, an eight-month high, while imports jumped 187,000 b/d to 1.031 million b/d.
Refiners pushed gasoline yields to 60.33%, not especially high level for this time of year and one that was rivaled by distillates. Distillate yields jumped to 27.92%, a level normally seen during peak winter fuel demand and one that allowed stocks to build 2.457 million barrels.
At 159.376 million barrels, stocks of middle distillates were 31.819 million barrels above the five-year average and 4.377 million barrels above year-ago levels.
However, distillate demand retreated, falling 234,000 b/d to 3.55 million b/d, which was likely a drop in exports, and not actual consumption.
While implied gasoline demand underwent a substantial boost, total U.S. oil demand dropped back below 19 million b/d for the first time in two months. U.S. oil demand fell 516,000 b/d to 18.961 million b/d with a decline in "other oils," with middle distillates and residual fuel oil accounting for all of the drop, reflecting the uneven state of the economy. An increase in gasoline and jet fuel demand prevented overall U.S. oil demand from falling further.
Total U.S. product stocks were essentially unchanged at 726.602 million barrels, which left inventories 26.009 million barrels above the five-year average, but 32.298 million barrels below year-ago levels.
The one bullish nugget in this week's report was the larger-than-expected 2.007-million-barrel decline in U.S. crude oil stocks. At 363.115 million barrels, U.S. crude stocks were 29.076 million barrels above the five-year average and 12.922 million barrels above year-ago levels, having maintained large surpluses against the averages despite this week's draw in inventories.
More importantly, stocks at Cushing, Oklahoma – home of the New York Mercantile Exchange (NYMEX) crude oil futures contracts delivery point – declined 795,000 barrels to 35.989 million barrels, the second consecutive drop in stocks in that region and justification for the narrowing in the front of the futures price curve on NYMEX.
*Implied demand is the amount of product that moves through the U.S. distribution system, not actual end consumption.
*Editor’s Note: Linda Rafield’s commentary is based on her knowledge of market trends, information from industry sources, and her own views as a long-time energy analyst. Please contact Kathleen Tanzy if you require any additional information or would like to interview Linda Rafield.
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This analyst survey is conducted by Platts’ editorial team in Washington DC and is published every Wednesday morning, one day ahead of the 10:30 am (EST) Thursday release of the weekly natural gas storage report of the US Energy Information Administration. Platts has been conducting this survey since January 2007. IMPORTANT NOTE TO EDITORS: The survey results attached above do not contain commentary from a Platts staff member. The survey is conducted and prepared by the Platts market news editors, but the views are those of non-Platts market analysts. The survey includes 15 to 25 analysts, some on a rotational basis. This differs from the weekly pre-report analyst survey of EIA/API US oil stocks data conducted each week by Platts editors, which does include the views of Platts’ editors.
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