The U.S. Energy Department's weekly inventory release showed
that crude stockpiles logged an increase, as refinery demand
weakened. The report further revealed that within the 'refined
products' category, gasoline stocks rose, while distillate
supplies were down from the week-ago levels.
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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 2.62 million barrels for the week ending Feb
1, 2013, following a climb of 5.95 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 3 million barrels. A
drop in refinery utilization rates led to the stockpile build-up
with the world's biggest oil consumer even as imports decreased.
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 315,000 barrels from the
previous week's level to 51.36 million barrels. Stocks are
currently just under the all-time high of 51.86 million barrels
reached in January.
At 371.68 million barrels, current crude supplies are 9.6% 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 from 25.0 days in the previous week to 25.5 days. In the
year-ago period, the supply cover was 23.6 days.
Supplies of gasoline were up for the first time in 3 weeks, as
domestic consumption fell and imports rose. This was partially
offset by lower production.
The 1.74 million barrels gain - in line with the analysts'
projections - took gasoline stockpiles up to 234.04 million
barrels. As a result of this build, the existing inventory level
of the most widely used petroleum product is 0.9% higher than the
year-earlier level and is in the upper half of the average range.
Distillate fuel supplies (including diesel and heating oil) fell
1.04 million barrels last week, higher than the analysts'
expectations for a 750,000 barrels drop in inventory level. The
decrease in distillate fuel stocks - the second in as many weeks
- could be attributed to sharply lower imports, partially offset
by weaker demand and higher production.
At 129.58 million barrels, distillate supplies are 11.6% 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 0.8% from the prior week to 84.2%.
The analysts were expecting the refinery run rate to go down by
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).