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EIA report on US oil inventories 06/09/2012

Published Thursday, September 6th, 2012

With the exception of distillate inventories there were draws in the main categories. This should not come as a surprise. Given the refinery and oil production shut-downs last week in the USGC these falls in inventories were expected therefore the flavor of the latest report from the EIA on US oil inventories is neutral. Total commercial stocks fell 9.6 million bbls. They stand  3.8 million bbls or 0.4% higher than a year ago and 8.9 mln bbls or 0.8% above the 5-year average.

The fall in crude oil stocks was more or less the same as the API numbers and bigger than the forecast. Not surprisingly, almost the entire fall concentrated on PADD3. The same is true for refinery runs. It fell 5.1% on the week nationwide and 9.2% in the USGC. Isaac significantly hindered crude oil imports which fell by 1.46 mbpd to 7.995 mbpd, the lowest level since Decemebr last year. Crude oil stocks at Cushing, Oklahoma marginally grew and they are flirting with the 45 million bbls  level. Total crude oil inventories are 4 million bbls or 1.1% above last year’s level and 13.64 million bbls or 3.8% above the 5-year average.

Stock movements in gasoline were very similar to that of crude. All of the build, which was slightly lower than expectations, was concentrated to PADD3. This drop took nationwide inventories 9.95 million bbls or 5% below last year’s stock level and 7.6 million bbls or 3.8% below the 5-year average.

Whilst the market thought distillate stocks would decrease, too, they did not. It was not because refiners kept producing this product in the USGC. PADD3 inventories fell by 1.2 million bbls but the rest of the country saw an increase, especially PADD2 (+1.750 million bbls) where refiners still operate at 94.7% of their total capacity. Despite this overall build distillate is still the most bullish of all. Total inventories are 30 million bbls or 23.4% lower than this time of last year and 23.7 million bbls or 18.7% below the 5-year average. In the biggest Heating Oil consuming region, on the US East Coast, distillate inventories are more than 30% lower than a year ago – a dangerous situation in case of a cold winter.

Although total product demand fell 1% compared to last year on the 4-week average basis it is still firmly above the 19 mbpd mark. Distillate demand was down 9.3% at 3.48 mbpd whilst gasoline demand actually rose. It was up by 0.7% at 9.16 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.