Technical & Fundamental Oil Reports Specialists

Follow us

Weekly EIA stats on US oil stocks 11/10/2012

Published Thursday, October 11th, 2012

The latest statistics on US oil inventories were positive for the main products, especially for distillates and negative for crude oil. As a result we should see some further strengthening of the crack spread, namely the Heat-to-crude crack. Total commercial stocks  registered their third consecutive weekly fall, this time by 4.4 million bbls. They are 23.9 million bbls or 2.2% higher than this time of last year and 21.4 million bbls or 1.9% above the 5-year average.

The build in crude oil stocks matched the API estimate, therefore it was negative since the market only expected an increase of 0.8 million bbls.Imports rose by 115,000 bpd to 8.18 mbpd. Probably this is the reason why crude oil stocks were up nearly 0.8 mln bbls in PADD3. Cushing stocks rose by 0.3 million bbls., which does not bode well for the WTI structure. They are currently over 44 mln bbls and 13.5 million bbls higher than a year ago and more than 14 million bbls above the 5-year average. Falling refinery utilization (-1.5% at 86.7%) also contributed to the bigger-than-expected stockbuild in crude oil. Nationwide inventories are 28.7 million bbls or 7.8% higher than this time of last year and 25.5 million bbls or 6.9% above the 5-year average.

We saw a sharp drop in distillate stocks although it was not as dramatic as the API figure. Nevertheless, it was significant as it takes distillate inventroies 33.1 million bbls or 27.4% below last year’s level and 27.4 million bbls or 22.7% below the 5-year average. Total distillate imports stood at 114,000 bpd last week, which is quite low by historic standards – the 5-year average is 160,000 bpd. On the other hand, net US exports jumped to 1.34 mbpd, the highest level since May. We can only speculate that the lion’s share of this export was distillate, hence the big draw in stock levels.

Since the API reported a build in gasoline inventories and the forecast was for unchanged, the 0.5 million bbls draw has to be viewed as positive. Although gasoline stocks are not as tight as distillate they are still 14.2 million bbls or 7.3% below last year’s levels and 9.5 million bbls or 4.8% below the 5-year average.

The general fall in product stocks is related to the US being a net exporter as demand figures continue to disappoint. Total product demand fell 2.4% last week comared to a year ago on a 4-week average basis to 18.52 mbps, gasoline demand was down 3.3% at 8.66 mbpd and distillate demand 3.5% at 3.83 mbpd.

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.