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Weekly EIA stats on US Oil Inventories 08/05/2013

Published Wednesday, May 8th, 2013

Despite crude data is less bearish than the API figure and the Reuters survey and despite the gasoline draw is slightly more than anticipated the initial market reaction of the latest stats from the EIA on US oil inventroies was bearish. It is partly because total commercial stocks increased by 3.47 million bbls. They are 2.7% over last year’s level and 2.0% above the 5-year average.

The minimal jump in crude oil stocks take inventories to yet another all-time high – probably bearish in itself. This build came despite crude oil imports fell 560,000 bpd to 7.559 mbpd. They were only 190,000 bpd above domestic production last week. It is probably the question of a few weeks now that domestic production will exceed crude oil imports. The slight drop in Cushing stocks somewhat supports the WTI structure. Since hitting a high of nearly 52 million bbls in January front-month WTI spread has fallen from 50 cts/bbl to 22 cts/bbl currently. Crude oil stocks are 4.2% above last year’s level and 5.1% above the 5-year average.

The draw in gasoline inventories is bullish if anything but it quickly has to be pointed out that inventories in this product are currently 7.8 million bbls above last year’s level in the main consuming area of the US East Coast. In PADD1 refiners were ramping up runs, which stood at 92.6%, the highest level since June 2010 when record began.

The bigger-than-expected increase in nationwide distillate stocks take inventories only 2.7% below last year’s level and 13.8% below the 5-year average. Gross product imports at 2.605 mbpd are at their highest level since December 2011 therefore net product exports at 239.000 bpd are at their lowest level since July 2012.

Total product demand fell to 18.53 mbpd last week , down 0.9% compared to a year ago on the 4-week average basis. Gasoline demand was down 2.4% at 8.50 mbpd and distillate demand nosedived 5.1% to 3.64 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.