Technical & Fundamental Oil Reports Specialists

Follow us

Commentary on weekly EIA stats on US oil stocks 15-08-2012

Published Wednesday, August 15th, 2012

The latest statistics on US oil inventories were more bullish than expectations and definetely more bullish than the API report. To begin with, total commercial stocks dropped by 4.6 mln bbls, the fourth consecutive weekly fall. They are 15.8 mln bbls or 1.4% higher than last year and 16 mln bbls or 1.5% above the 5-year average.

The draw in crude oil inventories is much bigger than expectations and is in sharp contrast with the build reported by the API. In fact, because of this discrepency between the two reports crude oil stocks are now seen roughly at the same level by both agencies (367 mln bbls by the API and 366 mln bbls by the EIA). During the last three weeks inventories have fallen by 14 mln bbls but they still stand 12.2 mln bbls or 3.3% over last year’s levels and 21.6 mln bbls or 5.9% over the 5-year average. The fall came despite refinery runs remained unchanged and crude oil imports grew by 90.000 bpd to 8,667 mbpd. Cushing stocks climbed after two weeks of draw but they are still some 2.5 mln bbls below the all-time high from May this year although 11.5 mln bbls above both last year’s level and the 5-year average.

On the product front the slight increase in distillate inventories disappointed a little bit as the market expected some draw but this build was still less than the API figure. We are slowly heading into the winter season with distillate inventories 11.8 mln bbls or 43% lower than this time of last year and12.4 mln bbls or 45% below the 5-year average. It  is by far the most bullish part of the stock report and if stocks do not start building quickly, distillate itself might support the whole energy complex on its own. in coming months

The fall in gasoline stocks was bigger then the API figure but inventories in this product are only 6.4 mln bbls or 3.1% below last year’s level and 6.7 mln bbls or 3.3% below the 5-year average.

Demand figures are as bullish distillate stock levels. Total product demand is up at 19.3 mbpd on a 4-week average basis and is the highest since September 2011. Weekly demand climbed over 20 mbpd for the first time since October last year. Demand for distillate and gasoline fell by 2.5% and 2.8% to 3.65 mbpd and to 8.91 mbpd respectively.

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.