The U.S. Energy Department's weekly inventory release showed
that crude stockpiles logged a surprise increase, as imports
climbed and refinery demand weakened. The report further revealed
that refined product inventories - gasoline and distillate -
increased from their previous week 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, such
Valero Energy Corp.
Analysis of the Data
The federal government's EIA report revealed that crude
inventories rose by 843,000 barrels for the week ending December
7, 2012, following a drop of 2.36 million barrels in the previous
The analysts surveyed by Platts - the energy information arm of
McGraw-Hill Companies Inc.
), had expected oil stocks to go down some 2.5 million barrels.
An uptick in the level of imports and a slight drop in refinery
utilization rates led to the surprise stockpile build-up with the
world's biggest oil consumer.
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 - jumped 1.19 million barrels
from the previous week's level to 46.82 million barrels. Stocks
are currently just under the all-time high of 47.78 million
barrels reached in June.
At 372.61 million barrels, current crude supplies are 11.5% 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 24.7 days in the previous week to 24.5 days. In the
year-ago period, the supply cover was 22.6 days.
Supplies of gasoline were up for the third time in as many weeks
despite improvement in domestic consumption and lower production.
The increase in gasoline inventories could be attributed to
The 5 million barrels jump - double the analysts' projections for
a 2.5 million barrels increase in supply level - took gasoline
stockpiles up to 217.12 million barrels. However, notwithstanding
this build, the existing inventory level of the most widely used
petroleum product is still 0.8% off the year-earlier levels
though it is in the upper half of the average range.
Distillate fuel supplies (including diesel and heating oil)
gained 2.99 million barrels last week, much higher than analysts'
expectations for a 1.25 million barrels increase in inventory
level. The sharp rise in distillate fuel stocks - the second in 2
weeks - could be attributed to weaker demand and higher imports,
partially offset by lower production.
At 118.06 million barrels, distillate supplies are 16.5% below
the year-ago level and are well under the lower limit of the
average range for this time of the year.
Refinery utilization was down 0.2% from the prior week to