Analysis of US EIA data: Product stocks mount on high refiner output
New York - August 25, 2010
High levels of refiner output resulted in another 4.813 million barrel build of product inventory, as demand started to edge lower, an analysis of Wednesday's US Energy Information Administration (EIA) weekly data showed. This analysis and commentary is provided by Linda Rafield, Platts senior oil analyst and editor of the weekly Futures and Derivatives Review, a supplement to Platts Oilgram Price Report.
US product inventories at 781.026 million barrels were 65.182 million barrels above the five-year average and 19.026 million barrels above year-ago levels the week ending August 20. This is the highest surplus level seen in 2010 against the five-year average.
Stock builds were evident in every product with the exception of residual fuel oil, still benefiting from an unusually hot summer and power generation needs.
Gasoline stocks jumped 2.273 million barrels to 225.617 million barrels, while middle distillates rose 1.763 million barrels to 175.974 million barrels. Gasoline inventories were 26.293 million barrels above the five-year average and 17.563 million barrels above year-ago levels.
Stocks of middle distillates were 37.223 million barrels above the five-year average and 13.59 million barrels above year-ago levels.
Stocks of jet fuel edged up 104,000 barrels to 48.144 million barrels while inventories of "other oils" climbed 2.175 million barrels to 212.778 million barrels.
Inventories of propane and propylene increased 1.128 million barrels to 60.949 million barrels.
Copious quantities of refiner output were behind product stock builds, despite the recent deceleration in demand and high levels of imports.
Finished motor gasoline production climbed 173,000 barrels per day (b/d) to 9.619 million b/d, the second highest level ever, while output of middle distillates jumped 150,000 b/d to 4.394 million b/d.
Gasoline yields jumped to an exceptionally high 61.12%, but high levels of gasoline output came at the expense of distillates, where inventory building has slowed.
Gasoline imports soared 331,000 b/d to 1.410 million b/d while imports of middle distillates were lower week-over-week. Middle distillate imports fell 97,000 b/d to 163,000 b/d, no surprise given the lack of seasonality.
U.S. oil demand started to show signs of fatigue again, declining 238,000 b/d to 19.484 million b/d with the decreases confined to gasoline and distillates. Gasoline demand dropped 84,000 b/d to 9.375 million b/d, a still healthy reading given the general economy, while demand for middle distillates edged down 46,000 b/d to 3.628 million b/d.
Demand for "other oils" was down 322,000 b/d to 3.731 million b/d with refiners running less feedstock as a result of lower inputs.
Refiners throttled back inputs dramatically, with crude runs falling 348,000 b/d to 14.89 million b/d – a four-month low.
*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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