The U.S. Energy Department's weekly inventory release showed
that crude stockpiles fell sharply, as Hurricane Isaac shut down
most of the Gulf of Mexico production. 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 were forced to pull back their
utilization rates by 5.1% on the back of hurricane-related
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 7.43 million barrels for the week ending August 31, 2012,
following a jump of 3.78 million barrels in the previous week.
Analysts surveyed by Platts, the energy information arm of
McGraw-Hill Companies Inc.
), had expected oil stocks to go down some 5 million barrels.
Hurricane Isaac-related shutdowns in the Gulf of Mexico production
facilities and import terminals led to the stockpile drawdown 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 up by 94,000 barrels from the previous
week's level to 44.92 million barrels. Stocks are currently just
under the all-time high of 47.78 million barrels reached in June.
At 357.10 million barrels, current crude supplies are 1.1% above
the year-earlier level, and are near the upper limit of the average
for this time of the year. The crude supply cover was down
marginally from 23.5 days in the previous week to 23.4 days. In the
year-ago period, the supply cover was 22.8 days.
Supplies of gasoline decreased for the sixth time in as many weeks
as domestic consumption improved 1.2% to 9.18 million barrels a
day. This was partially offset by higher production and imports.
The 2.33 million barrels drop - below the analyst projections -
took gasoline stockpiles down to 198.89 million barrels. As a
result of this decrease, the existing inventory level of the most
widely used petroleum product is now 4.7% off the year-earlier
levels and is in the lower limit of the average range.
Distillate fuel supplies (including diesel and heating oil) rose by
993,000 barrels last week, contrary to analyst expectations for a
1.5 million barrels decline in inventory level. The rise in
distillate fuel stocks - the fourth in as many weeks - could be
attributed to weaker demand.
At 127.08 million barrels, distillate supplies are 18.9% below the
year-ago level and are under the lower limit of the average range
for this time of the year.
Refinery utilization tumbled 5.1% from the prior week to 86.1%, as
Hurricane Isaac forced several facilities to shut down or scale
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