Technical & Fundamental Oil Reports Specialists

Follow us

Weekly EIA report on US oil stocks 24/10/2012

Published Wednesday, October 24th, 2012

Whichever way we are looking at it this week’s data from the EIA on US oil inventories was more bearish than the API figures and forecast. To begin with, total commercial stocks jumped by nearly 4 million bbls. They are currently 35 million bbls or 3.2% above last year’s level and 22 million bbls or 2% above the 5-year average.

Moving on to crude oil the 5 .9 million jump is much bigger than expectations or the API estimates. PADD3 is responsible for the majority of the build as it grew by 5.5 million bbls, mainly because imports jumped by 0.5 mbpd to 8.78 mbpd. Refinery runs that fell 8.1% on the US East Coast also contributed to the bearish figure. Domestic crude oil production hit a new 17-year high at 6.61 mbpd; again not exactly supportive for prices. Total crude oil stocks are 37 million bbls higher than this time last year and 29 million bbls or 7.8% above the 5-year average.

The tiny draw in distillate inventories was smaller than the market hoped for or the API figure therefore it is not too bullish either, although on the historic basis this product should be the most attractive, at least compared to others. It is 27 million bbls or 23% below last year’s level and the 5-year average.

The gasoline build is bigger than what was reported by the API although inventroies in this product are still 6.4 million bbls or 3.2% lower than last year and 5.8 million bbls or 2.9% lower than the 5-year average.

Demand figures provide an interesting reading. Distillate demand fell 7.7% to 3.83 mbpd over last year on the 4-week average basis and gasoline demand was down by 1.8% at 8.61 mbps. These two products make up more than 50% of the total US product demand yet the total figure shows an increase of 1.4% to 19.02 mbpd. The total jump was caused by jet fuel demand increasing by 100,000 bpd, propane/propylene demand increasing by some 230,000 bpd and other products growing by 400,000 bpd.

This week’s statistics is negative and will do nothing to stop the downtrend in oil prices that started over a month ago.

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.