The U.S. Energy Department's weekly inventory release showed
that crude stockpiles increased for the third week in a row, as
imports climbed. The report further revealed that within the
'refined products' category, gasoline stocks rose, while
distillate supplies were down from the week-ago levels.
Meanwhile, refiners scaled back their utilization rates by 0.2%.
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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 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 jumped by 5.90 million barrels for the week ending
October 19, 2012, following a climb of 2.86 million barrels in
the previous week.
The analysts surveyed by Platts - the energy information arm of
McGraw-Hill Companies Inc.
), had expected oil stocks to go up some 1.7 million barrels. A
surge in the level of imports led to the stockpile build-up with
the world's biggest oil consumer.
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 - edged up by 40,000 barrels
from the previous week's level to 44.07 million barrels. Stocks
are currently just under the all-time high of 47.78 million
barrels reached in June.
At 375.13 million barrels, current crude supplies are 11.1% above
the year-earlier level, and exceeds the upper limit of the
average for this time of the year. The crude supply cover was up
from 25.0 days in the previous week to 25.3 days. In the year-ago
period, the supply cover was 23.0 days.
Supplies of gasoline were up for the second consecutive week, as
domestic consumption tumbled. This was partially offset by
falling imports and production.
The 1.44 million barrels gain - contrary to analyst projections
for a decline in supply level - took gasoline stockpiles up to
198.57 million barrels. However, notwithstanding this build, the
existing inventory level of the most widely used petroleum
product is still 3.1% off the year-earlier levels and is in the
lower limit of the average range.
Distillate fuel supplies (including diesel and heating oil)
dropped by 646,000 barrels last week, much lower than analyst
expectations for a 1.5 million barrels decrease in inventory
level. The marginal fall in distillate fuel stocks - the sixth in
as many weeks - could be attributed to lower imports and
production, partially offset by weaker demand.
At 118.02 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 was down 0.2% from the prior week to 87.2%.
The analysts were expecting the refinery run rate to decline by