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Commentary on weekly EIA stats 17/04/2013

Published Wednesday, April 17th, 2013

The latest report from the EIA was more negative than the API data therefore the immediate sell-off after the release of the stats is not surprising. To begin with total commercial stocks jumped again after last week’s increase. They are 1.7% above last year’s level and 2.5% above the 5-year average.

It seems that the extent of the draw in crude oil inventroies was decided by the import figures. The API saw crude oil imports dropping by nearly 1.5 mbpd, hence the 6.7 million bbls drop in stocks. The same figures from the EIA are 0.3 mbpd and 1.2 million bbls. The market expected some build so the crude draw could be seen as positive. However, Cushing stocks grew by 1.1 million bbls and they are only some 700,000 bbls below the all-time high. The most interesting element of the crude part is that the gap between imports and production narrowed to 178.000 bbls (7.386 mbpd vs 7.208 mbpd). Needless to say the latter is a fresh 21-year high. Crude stocks seem ample; they are 5.0% and 5.7% above last year’s level and the 5-year average.

Product numbers, especially distillates, are more on the negative side, too. Distillate stocks registered an unexpected build which takes inventories in this product 10.7% lower than this time last year and 15.2% below the 5-year average. Gasoline inventories showed a slight drop but they are still higher than last year and the 5-year average (3.6% and 2.5% respectively). The gasoline situation is especially bearish in PADD1 where stocks are close to 60 million bbls, 9% above last year’s level. Gross product imports at 2.268 mbpd is the highest since mid-December, which makes net product exports the lowest during the same period (581,000 bpd). These figures are not supportive either.

Total product demand rose 0.2% to 18.61 mbpd last week compared to a year ago.  Gasoline demand fell 3.3% to 8.45 mbpd and ditillate demand grew by 2.9% to 3.90 mbpd on a 4-week average 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.