Analysis of US EIA data: US crude stocks build as run rates drop off
New York - October 6, 2010
US commercial crude stocks climbed 3.088 million barrels to 360.948 million barrels as a decline in refinery inputs more than offset a slight drop in imports, an analysis of the weekly data from the Energy Information Administration (EIA) 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.
At 360.948 million barrels, U.S. commercial crude stocks were 41.537 million barrels above the five-year average and 23.522 million barrels above year-ago levels – the largest surplus against the previous year.
Crude inputs to refineries declined 515,000 barrels per day (b/d) to 14.151 million b/d with the steep decreases occurring on the Atlantic, Gulf and West coasts.
Crude runs on the Atlantic Coast dropped 154,000 b/d to 951,000 b/d, the lowest level since the EIA started providing the data in 1992, a reflection of lost refining capacity in the region and ConocoPhillip's 238,000 b/d Linden, New Jersey, facility starting maintenance.
Inputs on the Gulf Coast fell 194,000 b/d to 7.114 million b/d while runs on the West Coast declined 168,000 b/d to 2.373 million b/d.
As a result of the drop in crude runs, stock-building occurred on the Atlantic and Gulf coasts and the Midwest. Stocks in the Midwest climbed 584,000 barrels to 91.314 million barrels, and within that region inventories at Cushing, Oklahoma – home of the New York Mercantile Exchange (NYMEX) delivery point for oil futures contracts – increased 749,000 barrels to 35.094 million barrels. This was the first build in Cushing stocks in nine weeks and will likely cause the front of the futures curve to weaken anew.
The combination of declining output and an exceptionally low level of imports caused gasoline stocks to drop 2.646 million barrels to 219.943 million barrels.
The draw in gasoline stocks occurred despite a 394,000-barrel decline in demand. Gasoline demand fell to 8.989 million b/d, more in line with seasonal tendencies than the previous week's 9.383 million b/d. Gasoline imports continued to reflect weak demand, edging down 168,000 b/d to 713,000 b/d, an eight-month low.
Also contributing to the drop in gasoline stocks was the decline in output, which fell 105,000 b/d to 9.1 million b/d, a typical occurrence at this time of year.
Also in line with seasonal tendencies was the 1.124-million-barrel drop in stocks of middle distillates. At 172.465 million barrels, middle distillates were still 30.933 million barrels above the five-year average, but only 709,000 barrels above year-ago levels. The draw was concentrated in diesel.
Diesel stocks declined 1.636 million barrels to 11.531 million barrels. Heating oil supplies should start their seasonal decline in the next report given the arrival of the first cool temperatures along the Atlantic Coast.
Demand for distillates fell 175,000 b/d to 3.724 million b/d.
Despite the increase in demand for middle distillates and jet fuel, U.S. oil demand dropped a steep 1.255 million b/d to 18.453 million b/d. The drop in gasoline demand as well as that for "other oils" accounted for the entire decline in oil demand.
*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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