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Commentary on weekly US oil stock report from the EIA 10/04/2013

Published Wednesday, April 10th, 2013

This week’s figures from the EIA on US oil stocks are more on the negative side for three reasons: firstly crude oil production climbed higher and is at a new 20-year high, secondly gasoline stocks built despite a forecast of a draw and thirdly total commercial stocks grew by 5.8 million bbls after nine consecutive weekly fall. They are 1.2% higher than last year and 2.3% above the 5-year average.

Although the build in crude oil inventories was much smaller than the API number but crude oil stocks are the highest since July 1990. Throw in the high domestic production and the picture is not particularly positive. Crude oil imports fell 211,000 bpd and they are only some 500,000 bpd above the output.  Cushing stocks increased by 889,000 bbls and they are back above the 50 million bbls mark.

The 0.5% increase in refinery utilization is being felt in gasoline stocks that jumped some 1.7 million bbls when analysts expected a draw of 1.1 million bbls. This build takes stocks in this product 2.2% above last year’s level and 2.0% above the 5-year average.

Distillate is different. Stocks in this product decreased slightly although not as much as expected or forecast. Nevertheless, the year-on-year deficit is 14.5% and current stocks are 17.3% below the 5-year average.

Total gross product imports increased by 250,000 bpd to 2.11 mbpd, which makes net product imports stand at less than 800,000 bpd, the lowest level since December last year; again, it is slightly negative.

Total product demand was up 0.9% last week on the year at 18.43 mbpd on the 4-week average basis. Distillate demand was up 8.3% at 3.88 mbpd but gasoline demand fell 2.4% to 8.43 mbpd.

In a nutshell, apart from the relatively low distillate stocks and the growing distillate demand it is hard to find anything bullish in this week’s report.

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.