The U.S. Energy Department's weekly inventory release showed
that crude stockpiles notched up another all-time high, as
refiners scaled down their utilization rates. The report further
revealed that within the 'refined products' category, gasoline
stocks fell, while distillate supplies were up from the week-ago
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
Crude Oil: The federal government's EIA report revealed that
crude inventories jumped by 3.0 million barrels for the week
ending May 24, 2013, following a decrease of 338,000 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 1.5 million
barrels. An uptick in domestic production and drop in refinery
utilization rates led to the surprise stockpile build-up with the
world's biggest oil consumer even as imports declined.
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 335,000 barrels from
the previous week's level to 50.51 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 397.55 million
barrels - the highest since EIA started gathering data in 1978 -
current crude supplies are 3.4% 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 marginally, from 26.1 days in the
previous week to 26.2 days. In the year-ago period, the supply
cover was 25.7 days.
Gasoline: Supplies of gasoline were down for the first time in 3
weeks, as domestic consumption strengthened amid falling
production and imports.
The 1.511 million barrels withdrawal - almost double the
analysts' projections for a 800,000 barrels decrease in supply
level - took gasoline stockpiles down to 219.16 million barrels.
Notwithstanding this drawdown, the existing inventory level of
the most widely used petroleum product is 9.5% higher than the
year-earlier level and is within the top half of the average
Distillate: Distillate fuel supplies (including diesel and
heating oil) were up 1.85 million barrels last week, as against
analysts' expectations for a 600,000 barrels drop in inventory
level. The increase in distillate fuel stocks - the sixth in 7
weeks - could be attributed to weaker demand and higher imports,
partially offset by lower production.
At 120.66 million barrels, distillate supplies are 2.5% above the
year-ago level but are in the lower limit of the average range
for this time of the year.
Refinery Rates: Refinery utilization was down 0.9% from the prior
week to 86.4%. The analysts were expecting the refinery run rate
to increase 0.6% to 87.9%.
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).
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