The U.S. Energy Department’s weekly inventory release showed an unexpected drop in crude and distillate stockpiles. The agency’s report further revealed that gasoline stocks fell for the ninth straight week, while refiners improved processing rates by 1.1%.
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 the 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 fell by 2.32 million barrels for the week ending April 15, 2011, contrary to expectations of a gain set by analysts who had been surveyed by Platts, the energy information arm of McGraw-Hill Companies Inc. (MHP). A large drop in imports and improved refinery operations led to the stockpile dip with the world’s biggest oil user.
Importantly, crude inventories at the Cushing terminal in Oklahoma – the key delivery hub for U.S. crude futures – came off 770,000 barrels from last week’s all-time high to 41.13 million barrels.
At 356.97 million barrels, current crude supplies are 0.3% higher than the year-earlier level and are in the upper limit of the average for this time of the year. The crude supply cover was down from 25.2 days in the previous week to 25.1 days. In the year-ago period, the supply cover was 24.4 days.
Gasoline
Supplies of gasoline fell for the ninth successive week as firms cut down on inventories to facilitate the changeover from winter to summer-grade gasoline specifications. The gasoline drawdown was also helped by lower imports even as demand showed signs of tapering off.
The 1.58 million-barrel drop – lower than projections – took gasoline stockpiles to 208.10 million barrels, down from a 20-year high of 241.1 million barrels in February. Current inventory levels are 7.5% below the year-earlier levels and are in the lower half of the average range.
Gasoline stockpiles have fallen by 33 million barrels since February 11, when they reached their highest in almost 21 years.
Distillate
Distillate fuel inventories (including diesel and heating oil) were down by 2.50 million barrels last week, as against analyst expectations for a stock build-up. The decrease in distillate fuel supplies can be attributed to a climb in demand, partially offset by surging imports.
At 148.34 million barrels, distillate supplies were 0.4% less than the year-ago level but are above the upper boundary of the average range for this time of the year.
Refinery Rates
Refinery utilization was up 1.1% from the prior week to 82.5%. Analysts were expecting the refinery run rate to increase 1.25% to 82.7%.
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