The U.S. Energy Department's weekly inventory release showed
that crude stockpiles declined, as imports fell even though
production climbed to its highest level in 19 years. The report
further revealed that refined product inventories - gasoline and
distillate - increased from their previous week levels.
Meanwhile, refiners scaled down their utilization rates by 1.2%.
The Energy Information Administration (EIA) Petroleum Status
Report, containing data of 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 the businesses
of the companies engaged in the oil and refining industry, such
Valero Energy Corp.
Analysis of the Data
The federal government's EIA report revealed that crude
inventories fell by 586,000 barrels for the week ending December
21, 2012, following a drop of 964,000 barrels in the previous
The 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
sharp drop in the level of imports led to the stockpile drawdown
with the world's biggest oil consumer even as refiners reduced
their utilization rates and domestic production continued to
spike, now at their highest level since 1993.
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 - soared 2.21 million barrels from the
previous week's level to hit a new all-time high of 49.18 million
At 371.06 million barrels, current crude supplies are 13.3% above
the year-earlier level, and comfortably exceed the upper limit of
the average for this time of the year. The crude supply cover
edged down from 24.1 days in the previous week to 24.0 days. In
the year-ago period, the supply cover was 22.2 days.
Supplies of gasoline were up for the fifth time in as many weeks
on the back of rising imports and production.
The 3.78 million barrels jump - significantly ahead of the
analysts' projections for a paltry 250,000 barrels increase in
supply level - took gasoline stockpiles up to 223.10 million
barrels. As a result of this build, the existing inventory level
of the most widely used petroleum product is 2.5% higher than the
year-earlier level and is well above the upper half of the
Distillate fuel supplies (including diesel and heating oil)
gained 2.42 million barrels last week, contrary to the analysts'
expectations for a 350,000 barrels draw in inventory level. The
surprise rise in distillate fuel stocks - the third in 4 weeks -
could be attributed to weaker demand and higher production,
partially offset by lower imports.
At 119.39 million barrels, distillate supplies are 15.0% below
the year-ago level and are under the lower limit of the average
range for this time of the year.
Refinery utilization nudged down 1.2% from the prior week to
CONOCOPHILLIPS (COP): Free Stock Analysis
CHEVRON CORP (CVX): Free Stock Analysis
MCGRAW-HILL COS (MHP): Free Stock Analysis
TESORO CORP (TSO): Free Stock Analysis Report
VALERO ENERGY (VLO): Free Stock Analysis
EXXON MOBIL CRP (XOM): Free Stock Analysis
To read this article on Zacks.com click here.