The U.S. Energy Department's weekly inventory release showed
that gasoline stockpiles increased unexpectedly, as refiners
scaled up their utilization rates in the face of muted demand.
The report further revealed that crude inventories jumped to hit
their highest level since 1990, 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 edged up by 250,000 barrels for the week ending Apr
05, 2013, following a climb of 2.71 million barrels in the
The analysts surveyed by Platts - the energy information arm of
McGraw-Hill Companies Inc.
), had expected crude stocks to go up some 1.4 million barrels.
Strong domestic production led to the modest stockpile build-up
with the world's biggest oil consumer even as imports fell and
refinery utilization rates continued to improve.
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 889,000 barrels from
the previous week's level to 50.07 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 388.87 million
barrels, current crude supplies are 6.5% 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 down from 26.6
days in the previous week to 26.1 days. In the year-ago period,
the supply cover was 25.2 days.
Supplies of gasoline were up for the first time in 9 weeks, as
domestic consumption weakened and imports jumped. This was
partially offset by lower production.
The 1.70 million barrels gain - contrary to analysts' projections
for a 1.8 million-barrel decrease in supply level - took gasoline
stockpiles up to 222.36 million barrels. Following this build,
the existing inventory level of the most widely used petroleum
product is 2.2% higher than the year-earlier level and is in the
top half of the average range.
Distillate fuel supplies (including diesel and heating oil) were
down 169,000 barrels last week, significantly below analysts'
expectations for a 1.8 million barrels drop in inventory level.
The decrease in distillate fuel stocks - the fifth in 6 weeks -
could be attributed to a decline in the ultra-low sulfur diesel
(ULSD) category, partially offset by weaker demand and higher
At 112.82 million barrels, distillate supplies are 14.5% below
the year-ago level and are in the lower limit of the average
range for this time of the year.
Refinery utilization was up 0.5% from the prior week to 86.8%.
The analysts were expecting the refinery run rate to increase
0.3% to 86.6%.
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).