The U.S. Energy Department's weekly inventory release showed
that crude stockpiles jumped to their highest level since the week
ending August 3, 2012 and refiners pushed up their utilization
rates by 4.2%, as the Hurricane Isaac-affected units in the Gulf of
Mexico were back to their regular operations. The report further
revealed that refined product inventories - gasoline and distillate
- dropped from their week-ago levels.
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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
jumped by 8.53 million barrels for the week ending September 14,
2012, following a climb of 1.99 million barrels in the previous
The analysts surveyed by Platts - the energy information arm of
McGraw-Hill Companies Inc.
), had expected oil stocks to go up some 2.5 million barrels. A
sharp rise in the level of imports and production - as normalcy
returned in the Gulf of Mexico facilities following Hurricane
Isaac-related shutdowns - led to the massive stockpile build-up
with the world's biggest oil consumer.
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 down by 274,000 barrels from the
previous week's level to 43.81 million barrels. Stocks are
currently just under the all-time high of 47.78 million barrels
reached in June.
At 367.63 million barrels, current crude supplies are 8.4% above
the year-earlier level, and exceeds the upper limit of the average
for this time of the year. The crude supply cover was up from 24.0
days in the previous week to 24.8 days. In the year-ago period, the
supply cover was 22.2 days.
Supplies of gasoline decreased for the eighth time in as many weeks
despite domestic consumption declining marginally. The fall in
gasoline inventories could be attributed to plummeting imports.
The 1.41 million barrels drop - contrary to analyst projections for
a 1 million barrel increase in supply level - took gasoline
stockpiles down to 196.31 million barrels. As a result of this
decrease, the existing inventory level of the most widely used
petroleum product is now 8.3% off the year-earlier levels and is in
the lower limit of the average range.
Distillate fuel supplies (including diesel and heating oil) inched
down by 322,000 barrels last week, as against analyst expectations
for a 1 million barrel increase in inventory level. The fall in
distillate fuel stocks - the first in six weeks - could be
attributed to stronger demand, partially offset by higher imports
At 128.23 million barrels, distillate supplies are 18.7% below the
year-ago level and are near the lower limit of the average range
for this time of the year.
Refinery utilization improved 4.2% from the prior week to 88.9%, as
the facilities resumed normal operations following the aftereffects
of Hurricane Isaac.