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Weekly EIA stats on US Oil stocks – Commentary 03/10/2012

Published Wednesday, October 3rd, 2012

The latest set of data from the EIA on US oil stocks did not look very exciting but if anything it was more on the positive side. Total commercial stocks fell. They are 26.8 million bbls or 2.4% above last year’s level and 28.3 million bbls or 2.6% above the 5-year average.

The slight drop in crude oil stocks is positive if anything since the market expected a rather significant build. What makes the figure constructive is a draw of 1.46 million bbls  in PADD3 despite nationwide imports up by 0.51 mbpd. The reason behind the draw in the USGC could be the jump of 1.4% in refinery runs to 89.9%. An increase of 0.14 million bbls in Cushing pushed stok level up to nearly 44 million bbls. Total crude oil inventories are 28.4 million bbls or 7.4% higher than this time of last year and 25.7 million bbls or 7.1% above the 5-year average.  On the negative side domestic crude oil production hit its highest level for nearly 16 years last week and stands at 6.52 mbpd.

There was a big and unexpected drop in distillate stocks. PADD2 and 3 are responsible for this fall totalling at 3.54 million bbls. It is an interesting development since refiners increased their runs in both areas. Probably distillate imports at 58,000 bpd played their part in the fall. It is the lowest level since the beginning of May. Total distillate inventories are 32.8 million bbls or 26.5% lower than a year ago and 25.5 million bbls or 20.5% below the 5-year average. In case of a cold winter this product in itself could support the whole energy complex.

The slight change in gasoline stocks pushed inventories 17.8 million bbls or 9.1% below last year’s level and 8.2 million bbls or 4.2% below the 5-year average. The US has constantly been a net exporters of products for over a year (last week exports stood at 0.88 mbpd) so it is perhaps not surprising that current stocks in the main product categories are well below historic levels.

Total product demand fell by 3.3% over the last four weeks compared to a year ago to 18.34 mbpd. Gasoline demand was down 2.5% at 8.68 mbpd and distillate demand fell 4.5% to 3.69 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.