The U.S. Energy Department’s weekly inventory release showed a continued build-up in crude stockpiles. The agency’s report further revealed that distillate stocks were added to their supplies, while gasoline inventories declined for the seventh-straight week though the fall was lower-than-projected. Meanwhile, refinery run-rates improved from the previous week.
The Energy Information Administration (“EIA”) Petroleum Status Report – which contains data for the previous week ending on Friday, outlines information regarding the weekly change in petroleum inventories held and produced by the U.S., both locally and abroad.
The report provides an overview of the level of reserves and their movements, thereby helping investors understand the demand/supply dynamics of petroleum products. It is an indicator of current oil prices and volatility that affect businesses of companies engaged in oil and refining industry, such as ExxonMobil (XOM), Chevron Corp. (CVX), ConocoPhillips (COP), Valero (VLO) and Tesoro (TSO).
Crude Oil
The federal government’s EIA report revealed that crude inventories rose by 1.95 million barrels for the week ending April 01, 2011, against expectation of a much smaller gain set by analysts surveyed by Platts, the energy information arm of McGraw-Hill Companies Inc. (MHP). Rising domestic production led to the stockpile build-up with the world’s biggest oil user, even as imports fell.
At 357.66 million barrels, current crude supplies are 0.4% higher than the year-earlier level and are above the upper limit of the average for this time of the year. The crude supply cover remained unchanged from the previous week at 25.0 days. In the year-ago period, the supply cover was 25.1 days.
However, crude inventories at the Cushing terminal in Oklahoma – the key delivery hub for U.S. crude futures – came off slightly (by 16,000 barrels) from last week’s all-time high to 41.87 million barrels.
But despite the continued glut in domestic oil stocks, crude prices continue to march higher and are currently trending at around $108 a barrel. This can be mainly attributable to concerns that the unrest in Libya will boil over to other oil rich nations in the Middle East and lead to a supply shortfall.
Gasoline
Supplies of gasoline fell for the seventh successive week as firms cut down on inventories to facilitate the changeover from winter to summer-grade gasoline specifications.
The 357,000 barrel drop – way short of projections – took gasoline stockpiles to 216.68 million barrels, down from a 20-year high of 241.1 million barrels in February. Current inventory levels are 2.6% below year-earlier levels but are in the upper half of the average range.
Distillate
Distillate fuel inventories (including diesel and heating oil) were up by 195,000 barrels last week, compared with analyst expectations for a larger build. The increase in distillate fuel supplies can be attributed to a rise in production partly offset by lower imports and improved demand.
At 153.52 million barrels, distillate supplies were 5.4% more than the year-ago level and also above the upper boundary of the average range for this time of the year.
Refinery Rates
Refinery utilization was up 0.3% from the prior week to 84.4%. Analysts were expecting the refinery run rate to increase 0.6% to 84.7%.
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