The U.S. Energy Department's weekly inventory release showed
that crude stockpiles logged an increase, as imports climbed and
refinery demand weakened. The report further revealed that
refined product inventories - gasoline and distillate - soared
from their previous week levels on weakening demand.
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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 rose by 1.31 million barrels for the week ending
January 4, 2013, following a plunge of 11.12 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 1.5 million barrels. A
steep climb in the level of imports and drop in refinery
utilization rates led to the stockpile build-up with the world's
biggest oil consumer. Additionally, domestic production continued
to spike, now at their highest level since 1993.
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 - was up 332,000 barrels from
the previous week's level to hit a new all-time high of 50.08
At 361.25 million barrels, current crude supplies are 8.0% 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 23.4 days in the previous week to 23.5 days. In
the year-ago period, the supply cover was 22.7 days.
Supplies of gasoline were up for the seventh time in as many
weeks, as domestic consumption fell sharply. This was partially
offset by lower imports and production.
The 7.41 million barrels jump - significantly ahead of the
analysts' projections for a 2.6 million barrels increase in
supply level - took gasoline stockpiles up to 233.08 million
barrels. As a result of this build, the existing inventory level
of the most widely used petroleum product is 4.2% higher than the
year-earlier level and is well above the upper half of the
Distillate fuel supplies (including diesel and heating oil)
climbed 6.78 million barrels last week, more than 4.5 times the
analysts' expectations for a 1.5 million barrels build in
inventory level. The rise in distillate fuel stocks - the fifth
in 6 weeks - could be attributed to weaker demand as well as
higher imports and production.
At 130.74 million barrels, distillate supplies are 11.4% 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 1.3% from the prior week to