The U.S. Energy Department's weekly inventory release showed
that crude stockpiles ticked up slightly, as production
recovered. The report further revealed that gasoline and
distillate supplies were up from the week-ago levels. Meanwhile,
refiners scaled up their utilization rates by 0.9% to cross 90%
for the first time this year.
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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 edged up by a nominal 18,000 barrels for the week
ending Jun 21, 2013, following an increase of 313,000 barrels in
the previous week.
The analysts surveyed by Platts - the energy information arm of
McGraw-Hill Financial Inc.
) - had expected crude stocks to go down some 2 million barrels.
An uptick in the level of production led to the surprise
stockpile build-up (albeit a minor one) with the world's biggest
oil consumer even as refiners improved their utilization rates
and imports pulled back.
In particular, 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 up 664,000 barrels from
the previous week's level to 49.26 million barrels. Stocks are
currently 5.0% under the all-time high of 51.86 million barrels
reached in Jan.
Following the slight weekly inventory increase, at 394.14 million
barrels, current crude supplies are 1.8% above the year-earlier
level, and exceeds the upper limit of the average for this time
of the year. The crude supply cover was down from 25.7 days in
the previous week to 25.5 days. In the year-ago period, the
supply cover was 24.8 days.
Supplies of gasoline were up for the third time in as many weeks
despite a rise in domestic consumption. The spike in gasoline
inventories could be attributed to sharply higher imports as well
as improvement in production.
The 3.65 million barrels gain - significantly above the analysts'
projections for a 1 million-barrels increase in supply level -
took gasoline stockpiles up to 225.38 million barrels. Following
this build, the existing inventory level of the most widely used
petroleum product is 10.1% higher than the year-earlier level and
is well above the top half of the average range.
Distillate fuel supplies (including diesel and heating oil) were
up 1.57 million last week, higher than analysts' expectations for
a 1 million barrels build in inventory level. The increase in
distillate fuel stocks - the first in 3 weeks - could be
attributed to higher production and imports, together with weaker
At 123.19 million barrels, distillate supplies are 3.6% above the
year-ago level but is in the lower limit of the average range for
this time of the year.
Refinery utilization was up 0.9% from the prior week to 90.2%.
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).