The U.S. Energy Department's weekly inventory release showed
that crude stockpiles logged an unexpected decrease, as imports
fell even though production climbed to its highest level since
1993. The report further revealed that refined product
inventories - gasoline and distillate - rose from their previous
week levels despite strengthening demand. Meanwhile, refiners
scaled down their utilization rates by 1.2%.
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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, such
Valero Energy Corp.
Analysis of the Data
The federal government's EIA report revealed that crude
inventories fell by 951,000 barrels for the week ending January
11, 2013, following a climb of 1.31 million barrels in the
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 drop in the level of imports led to the surprise 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 - was up 1.78 million barrels from the
previous week's level to hit a new all-time high of 51.86 million
At 360.30 million barrels, current crude supplies are 8.8% above
the year-earlier level, and comfortably exceed the upper limit of
the average for this time of the year. The crude supply cover was
up slightly from 23.5 days in the previous week to 23.6 days. In
the year-ago period, the supply cover was 22.5 days.
Supplies of gasoline were up for the eighth time in as many weeks
despite an improvement in domestic consumption and lower imports.
The rise in gasoline inventories could be attributed to higher
The 1.91 million barrels gain - compared to analysts' projections
for a 3.0 million barrels increase in supply level - took
gasoline stockpiles up to 234.99 million barrels. As a result of
this build, the existing inventory level of the most widely used
petroleum product is 3.3% higher than the year-earlier level and
is well above the upper half of the average range.
Distillate fuel supplies (including diesel and heating oil)
climbed 1.69 million barrels last week, slightly higher than the
analysts' expectations for a 1.6 million barrels build in
inventory level. The rise in distillate fuel stocks - the sixth
in 7 weeks - could be attributed to a pile up in the ultra-low
sulfur diesel (ULSD) category, partially offset by stronger
At 132.43 million barrels, distillate supplies are 10.5% below
the year-ago level and are close to the lower limit of the
average range for this time of the year.
Refinery utilization was down 1.2% from the prior week to 87.9%.
The analysts were expecting the refinery run rate to edge down by