The U.S. Energy Department's weekly inventory release showed
that crude stockpiles logged an unexpected decline, as refiners
scaled up their utilization rates. The report further revealed
that within the 'refined products' category, gasoline stocks
rose, while distillate supplies were down from the week-ago
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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 companies engaged in the oil and refining industry, such as
Valero Energy Corp.
Analysis of the Data
The federal government's EIA report revealed that crude
inventories fell by 347,000 barrels for the week ending November
23, 2012, following a drop of 1.47 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 500,000 barrels. An
uptick in refinery utilization rates led to the surprise
stockpile drawdown with the world's biggest oil consumer even as
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 - edged up by 707,000 barrels from the
previous week's level to 45.86 million barrels. Stocks are
currently just under the all-time high of 47.78 million barrels
reached in June.
At 374.12 million barrels, current crude supplies are 11.8% 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 25.4 days in the previous week to 25.2 days. In the
year-ago period, the supply cover was 22.9 days.
Supplies of gasoline were up for the first time in 3 weeks, as
domestic consumption tumbled. This was partially offset by
falling imports and production.
The 3.87 million barrels gain - compared to analyst projections
for a 1 million barrels increase in supply level - took gasoline
stockpiles up to 204.26 million barrels. However, notwithstanding
this build, the existing inventory level of the most widely used
petroleum product is still 2.6% off the year-earlier levels and
is in the lower half of the average range.
Distillate fuel supplies (including diesel and heating oil)
dropped by 800,000 barrels last week, much higher than analysts'
expectations for a 150,000 barrels decrease in inventory level.
The sharp decline in distillate fuel stocks - the tenth in 11
weeks - could be attributed to lower production, partially offset
by weaker demand and higher imports.
At 112.04 million barrels, distillate supplies are 19.1% 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 up 1.1% from the prior week to