The U.S. Energy Department's weekly inventory release showed a
steep drawdown in crude stockpiles. The report further revealed
that within the 'refined products' category, gasoline stocks
dropped, while distillate supplies were up from the week-ago
levels. Meanwhile, refiners pulled back their utilization rates by
CONOCOPHILLIPS (COP): Free Stock Analysis
CHEVRON CORP (CVX): Free Stock Analysis Report
MCGRAW-HILL COS (MHP): Free Stock Analysis
TESORO CORP (TSO): Free Stock Analysis Report
VALERO ENERGY (VLO): Free Stock Analysis Report
EXXON MOBIL CRP (XOM): Free Stock Analysis
To read this article on Zacks.com click here.
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 abroad.
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
fell by 5.41 million barrels for the week ending August 17, 2012,
following a slide of 3.70 million barrels the week before.
Analysts surveyed by Platts, the energy information arm of
McGraw-Hill Companies Inc.
), had expected oil stocks to go down some 2 million barrels. A dip
in the level of imports led to the fourth consecutive weekly
stockpile drawdown with the world's biggest oil consumer even as
refiners lowered their utilization rates.
However, crude inventories at the Cushing terminal in Oklahoma -
the key delivery hub for U.S. crude futures traded on the New York
Mercantile Exchange - edged up by 45,000 barrels from previous
week's level to 45.24 million barrels. Stocks are just under the
all-time high of 47.78 million barrels reached earlier in June.
At 360.75 million barrels, current crude supplies are 2.5% 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 down from
23.4 days in the previous week to 23.2 days. In the year-ago
period, the supply cover was 22.6 days.
Supplies of gasoline decreased for the fourth time in as many weeks
despite domestic consumption declining 2.4% to 9.08 million barrels
a day. The fall in gasoline inventories could be attributed to
lower production and imports.
The 962,000 barrels drop - slightly below analyst projections -
took gasoline stockpiles down to 202.74 million barrels. As a
result of this decrease, the existing inventory level of the most
widely used petroleum product is now 4.1% off the year-earlier
levels and is in the lower limit of the average range.
Distillate fuel supplies (including diesel and heating oil) inched
up by 992,000 barrels last week, essentially in line with analyst
expectations. The rise in distillate fuel stocks - the second in as
many weeks - could be attributed to weaker demand and higher
production. This was partially offset by lower imports.
At 125.21 million barrels, distillate supplies are 19.6% below the
year-ago level and are under the lower limit of the average range
for this time of the year.
Refinery utilization was down 1.4% from the prior week at 91.2%.
Analysts were expecting the refinery run rate to be unchanged at