The U.S. Energy Department's weekly inventory release showed
that crude stockpiles jumped to their highest level since July
1990, as imports climbed. The agency's report further revealed that
refined product inventories - gasoline and distillate - dropped
from their previous week levels on stronger demand. Meanwhile,
refinery utilization rate reflected an increase of 1.0%.
The Energy Information Administration ("EIA") Petroleum Status
Report, which contains data for the previous week ending Friday,
outlines information regarding the weekly change in petroleum
inventories held and produced by the U.S., both locally and
The report provides an overview of the level of reserves and
their movements, thereby helping investors understand the
demand/supply dynamics of petroleum products. It is an indicator of
current oil prices and volatility that affect businesses of
companies engaged in the oil and refining industry, such as
Valero Energy Corp.
Analysis of the Data
The federal government's EIA report revealed that crude inventories
rose by 2.21 million barrels for the week ending May 25, 2012,
after climbing by 883,000 barrels the week before. In fact, oil
supplies have shot up by 38.45 million barrels since the week
ending March 16, 2012, the largest ten-week accumulation in over a
Analysts surveyed by Platts, the energy information arm of
McGraw-Hill Companies Inc.
), had expected oil stocks to go up some 100,000 barrels. An uptick
in the level of imports - especially from Venezuela and Angola -
led to the stockpile build-up with the world's biggest oil consumer
even as refiners improved their utilization rates.
In particular, crude inventories at the Cushing terminal in
Oklahoma - the key delivery hub for U.S. crude futures traded on
the New York Mercantile Exchange - increased by 54,000 barrels from
previous week's level to hit a new all-time high of 46.85 million
At 384.74 million barrels, current crude supplies are 2.9% above
the year-earlier level, and are over the upper limit of the average
for this time of the year. The crude supply cover was flat with the
previous week's level of 25.7 days. In the year-ago period also,
the supply cover was 25.7 days.
Supplies of gasoline decreased for the fifteenth consecutive week
as domestic consumption edged up 3.5% to 8.93 million barrels a
day. This was partially offset by higher production and
The 833,000 barrels drop - compared to analyst projections for
an unchanged supply level - took gasoline stockpiles down to 200.18
million barrels, the lowest since November 2008. The existing
inventory level of the most widely used petroleum product is 5.7%
below the year-earlier levels and is below the lower limit of the
Distillate fuel supplies (including diesel and heating oil)
decreased by 1.71 million barrels last week, contrary to analyst
expectations for a 150,000 barrel build. The fall in distillate
fuel stocks - the fourteenth decline in 16 weeks - could be
attributed to stronger demand and a sharp drop in imports,
partially offset by higher production.
At 117.78 million barrels, distillate supplies are 15.9% below
the year-ago level and are in the lower limit of the average range
for this time of the year.
Refinery utilization was up 1.0% from the prior week at 89.1%.
Analysts were expecting the refinery run rate to increase 0.6%.
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