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Commentary on weekly EIA stats 30/01/2013

Published Wednesday, January 30th, 2013

Given the build in crude oil stocks and the draws in main product inventories this week’s report from the EIA was neutral-to-slightly negative. It was neutral because the big build in crude oil inventories offset the draws in the main product categories and it is slightly negative because total commercial stocks grew by 2 million bbls. They are 4.5% above last year’s level and 3.7% higher than the 5-year average. The reversed Seaway pipeline runs from PADD2 to PADD3. Crude oil stocks were up 853,000 bbls in the mid-Continent and nearly 2 million bbls up in the USGC. Cushing stock grew by a marginal 284,000 bbls. It tells us that the recent restriction on crude oil deliveries on the Seaway pipeline did not affect the off take in PADD2 and only had an impact in PADD3. If you consider that crude oil imports increased by 338,000 bpd then the actual affect could be considered minimal. The 1.8% drop in PADD1 refinery runs contributed to the jump of 1.4 million bbls on the US East Coast. The combined affect was crude oil inventories jumping 8.9% above last year’s level and 7.5% above the 5-year average.

 

Although the EIA reported a draw in gasoline stocks as opposed to the 2.7 million bbls build seen by the API absolute stock levels are at 232 million bbls with both agencies. According to the EIA it is 0.9% higher than this time of last year and 1.2% above the 5-year average. Stocks in PADD1 increased by 1.2 million bbls but refinery closure by Hess in February on the East Coast will probably decrease gasoline stocks in coming months there. The most bullish of all is the 2.3 million bbls draw in distillate stocks, which is bigger than forecast or the API figure. With the exception of PADD5 every PADD experienced a drop in stock levels in this product resulting nationwide inventories to be 10.2% below last year’s level and 11.9% below the 5-year average. Net product exports stood just below the 1 mbpd mark. Total product demand increased 0.5% to 18.36 mbpd from last year on the 4-week average basis. Gasoline demand rose 3% to 8.32 mbpd but thirst for distillate dropped 6.3% to 3.41 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.