The U.S. Energy Department's weekly inventory release showed
that crude stockpiles logged an increase, as imports climbed. The
report further revealed that within the 'refined products'
category, gasoline stocks fell, while distillate supplies were up
from the week-ago levels. Meanwhile, refiners scaled up their
utilization rates by 2.2%.
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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.
Analysis of the Data
The federal government's EIA report revealed that crude
inventories rose by 1.13 million barrels for the week ending Feb
22, 2013, following a climb of 4.14 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 2.6 million barrels. An
uptick in the level of imports led to the sixth straight weekly
stockpile build-up with the world's biggest oil consumer even as
domestic production declined and demand improved.
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 down 75,000 barrels from the
previous week's level to 50.58 million barrels. Stocks are
currently just under the all-time high of 51.86 million barrels
reached in January.
At 377.52 million barrels, current crude supplies are 9.4% above
the year-earlier level, and comfortably exceed the upper limit of
the average for this time of the year. The crude supply cover
inched up from 26.2 days in the previous week to 26.3 days. In
the year-ago period, the supply cover was 23.5 days.
Supplies of gasoline were down for the third time in as many
weeks, as domestic consumption strengthened. This was partially
offset by higher production and imports.
The 1.86 million barrels withdrawal - ahead of the analysts'
projections for a 1.5 million barrels decrease in supply level -
took gasoline stockpiles down to 228.49 million barrels.
Following this drawdown, the existing inventory level of the most
widely used petroleum product is 0.6% lower than the year-earlier
level despite being in the upper half of the average range.
Distillate fuel supplies (including diesel and heating oil) were
up 557,000 barrels last week, contrary to analysts' expectations
for a 1.7 million barrels drop in inventory level. The increase
in distillate fuel stocks - the first in 5 weeks - could be
attributed to weaker demand and higher production, partially
offset by lower imports.
At 124.18 million barrels, distillate supplies are 12.2% below
the year-ago level and are in the lower limit of the average
range for this time of the year.
Refinery utilization increased 2.2% from the prior week to 85.1%.
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).