The U.S. Energy Department's weekly inventory release showed
that crude stockpiles notched up to another all-time high level,
as production hit the maximum in 21 years. The report further
revealed that within the 'refined products' category, gasoline
stocks fell, while distillate supplies were up from the week-ago
level. Meanwhile, refiners scaled up their utilization rates by
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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.
Analysis of the Data
The federal government's EIA report revealed that crude
inventories rose by 230,000 barrels for the week ending May 3,
2013, following a jump of 6.70 million barrels in the previous
The analysts surveyed by Platts - the energy information arm of
McGraw-Hill Companies Inc.
) - had expected crude stocks to climb some 1.9 million barrels.
An increase in the level of domestic production - to their
highest level since Feb 1992 - led to the modest stockpile
build-up with the world's biggest oil consumer even as refiners
improved their utilization rates and imports pulled back sharply.
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 - were down 652,000 barrels from the
previous week's level to 49.15 million barrels. Stocks are
currently just under the all-time high of 51.86 million barrels
reached in January.
Following the weekly inventory increase, at 395.51 million
barrels, current crude supplies are 4.2% above the year-earlier
level, and comfortably exceed the upper limit of the average for
this time of the year. The crude supply cover remained flat from
the previous week at 26.6 days. In the year-ago period, the
supply cover was 26.0 days.
Supplies of gasoline were down for the twelfth time in 13 weeks,
as domestic consumption strengthened and production fell. This
was partially offset by higher imports.
The 910,000 barrels withdrawal - ahead of analysts' projections
for a 750,000 barrels decrease in supply level - took gasoline
stockpiles down to 215.07 million barrels. Notwithstanding this
drawdown, the existing inventory level of the most widely used
petroleum product is 3.9% higher than the year-earlier level and
is midway through the average range.
Distillate fuel supplies (including diesel and heating oil) were
up 1.81 million barrels last week, above analysts' expectations
for a 1 million barrels gain in inventory level. The increase in
distillate fuel stocks - the fourth in as many weeks - could be
attributed to higher production, partially offset by decline in
At 117.56 million barrels, distillate supplies are 2.6% 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 2.6% from the prior week to 87.0%.
The analysts were expecting the refinery run rate to increase
0.6% to 85.0%.
A bullish data from the EIA generally acts as a positive catalyst
for crude prices and buoy producers, such as
Exxon Mobil Corp.
). With an improvement in the companies' ability to generate
positive earnings surprises, they can then move higher from their
current Zacks Rank #3 (Hold).