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EIA report on US oil inventories 09/01/2013

Published Wednesday, January 9th, 2013

From whichever angle we are looking at the latest report from the EIA on US oil stocks it is hard to find anything bullish about it. Stock levels grew last week in general and main product demand figures fell. The EIA numbers are relatively close to those reported by the API. Total commercial stocks jumped 11 million bbls and they are sitting comfortably above last year’s level (+4.4%) and the 5-year average (+4.1%).

The increase in crude oil inventories is not surprising after the massive draw from the week before due to year-end tax activity. What is unusual, however, is that inventroies in PADD3 actually fell whilst crude oil imports increased by 1.25 mbpd to 8.3 mbpd and USGC refinery runs were down 1.8%. Domestic crude oil production popped over the 7 mbpd mark for the first time in nearly 20 years and Cushing stocks are above the 50 million bbls market for the first tim ever. Crude oil inventroies are 8% higher than a year ago and 7.4% above the 5-year average.

The picture on the product front is even more bearish with gasoline stocks up 7.4 million bbls and distillate inventories increasing by 6.8 million bbls. PADD2 saw the biggest jumps (+3.1 million bbls in gasoline and +1.9 million bbls in distillates) where refinery utilization  only increased slightly (+0.2%). Gross product exports stood at 2.91 mbpd and gross product imports at 2.09 mbpd leaving the US a net exporter of products of little over 800,000 bpd last week. Gasoline inventroies are 4.1% and 4.9% higher than a year ago and the 5-year average. The same figures on distillates are more bullish: -11.4% and -11.7% respectively.

Whilst total product demand jumped to 18.87 mbpd last week on the 4-week average basis (+2.4% on last year) thirst for gasoline and distillates fell by 2.3% to 8.44 mbpd and by 5% to 3.57 mbpd respectively. All things considered the weakening of the RBOB/WTI crack spread should not come as a surprise.

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.