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Commentary on weekly EIA stats 13/03/2013

Published Wednesday, March 13th, 2013

The EIA’s weekly report on US oil stocks was not as bullish as the API but cannot be categorized as bearish either. To begin with total commercial stocks dropped by 5.6 million bbls. It was the fifth consecutive weekly decline which takes inventories 2.6% above last year’s level and 2.8% above the 5-year average.

As far as crude oil is concerned the 2.6 million bbls build more or less matches expectations but contradicts the draw reported by the API. As far as absolute stock levels are concerned the EIA sees crude oil inventories at 384.0 million bbls whilst the API puts it at 377.6 million bbls. Is this the difference between compulsary and voluntary reporting? On the bullish side Cushing stocks fell by 1.53 million bbls and at the same time USGC inventroies built 3.34 million bbls. May be the affect of the Seaway pipeline is already being felt. Of course, crude oil imports jumping by 2.27 mbpd also helped PADD3 crude oil stocks increase. On the bearish side domestic output at 7.159 mbpd is a fresh 20-year high. Nationwide crude oil stocks are still more than adequate by historical standards; they are 10.5% higher than this time last year and 8.1% above the 5-year average.

On the product front the drop in gasoline stocks was relatively close to the API figure. Refinery runs that declined 1.2% and net product exports that are still over 1 mbpd could be responsible for the decline in this product. Total gasoline stocks are now 1.7% below last year’s level and only 0.2% above the 5-year average.

Although the slight build in distillate stocks is disappointing as the forecast was for a draw and the API reported a fall of 2.2 mln bbls stocks are still some 10.7% lower than a year ago and 14.3% lower than the 5-year average.

Demand figures were also bullish if anything. Total product demand at 18.50 mbpd is 1% higher than  during the same period of last year on the 4-week average basis. Thirst for distillates and gasoline also grew by 1.0% and 1.1% to 3.63 and 8.51 mbpd on the same basis. All things considered the latest report on US inventories is more on the positive side.

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.