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Another crude build, another stock draw in US oil stocks

Published Thursday, May 31st, 2012

The latest report from the EIA certainly does not help oil prices. The tendency of the last few weeks continued in that we saw build in crude oil inventories and draws in the main product levels. Total commercial stocks rose for the 6th consecutive week and they are 19 mln bbls or 1.8% higher than a year ago and 23 mln bbls or 2.1% above the 5-year average.

Despite the API saw crude oil stocks decreasing, the EIA thinks they rose for the 11th week. It is not as dramatic as it seems at first sight since inventories on the US West Coast jumped by nearly 1 mln bbls. Nevertheless, Cushing stocks also increased hitting a new all-time high at 46.85 mln bbls. The reason for the nationwide jump is probably growing imports that were up nearly 0.5 mbpd, just over 9 mbpd. Current crude oil stocks are 11 mln bbls or 2.8% higher than this time of last year and 25 mln bbls or 6.6% above the 5-year average. Needless to say the crude oil inventories have not been this high for 22 years.

Despite refiners increasing utilization by 1% to 89.1%, main product stocks saw another fall. On the distillate front it was the 9th weekly drop, which takes levels 22 mln bbls or 19% lower than a year ago and 16 mln bbls or 13.5% below the 5-year average. This fall takes distillate inventories to their lowest level since June 2008.

The situation is more or less the same in gasoline.
Stocks in this product have been falling for 16 weeks and are now at their lowest level fsince November 2008. They are 12 mln bbls or 6% below last year’s level and 8 mln bbls or 4% lower than the 5-year average.

On the demand front it is difficult to find anything encouraging. Total product demand fell  0.1% to 18.66 mbpd compared to last year on the 4-week average basis. Distillate demand is down 1% at 3.77 mbpd and gasoline demand dropped 2.6% to 8.85 mbpd on the same basis.

Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.

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