The U.S. Energy Department's weekly inventory release showed
that gasoline stockpiles increased unexpectedly, as domestic
production and imports jumped. The report further revealed that
crude and distillate supplies were down from the week-ago levels.
Meanwhile, refiners scaled down their utilization rates by 0.7%.
CONOCOPHILLIPS (COP): Free Stock Analysis
CHEVRON CORP (CVX): Free Stock Analysis
MCGRAW HILL FIN (MHFI): Free Stock Analysis
EXXON MOBIL CRP (XOM): Free Stock Analysis
To read this article on Zacks.com click here.
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 fell by 338,000 barrels for the week ending May 17,
2013, following a decrease of 624,000 barrels in the previous
The analysts surveyed by Platts - the energy information arm of
McGraw-Hill Financial Inc.
) - had expected crude stocks to go down some 1.2 million
barrels. A slide in domestic production led to the stockpile
drawdown with the world's biggest oil consumer even as refiners
reduced their utilization rates and imports spiked.
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 - were up 449,000 barrels from the
previous week's level to 50.17 million barrels. Stocks are
currently just under the all-time high of 51.86 million barrels
reached in January.
Despite the weekly inventory decrease, at 394.55 million barrels,
current crude supplies are 3.2% above the year-earlier level, and
exceeds the upper limit of the average for this time of the year.
The crude supply cover was down from 26.5 days in the previous
week to 26.1 days. In the year-ago period, the supply cover was
Supplies of gasoline were up for the second time in as many weeks
despite an improvement in domestic consumption. The rise in
gasoline inventories could be attributed to spiraling production
The 3.01 million barrels gain - contrary to analysts' projections
for a 200,000 barrels decrease in supply level - took gasoline
stockpiles up to 220.68 million barrels. Following this build,
the existing inventory level of the most widely used petroleum
product is 9.8% higher than the year-earlier level and is close
to the top half of the average range.
Distillate fuel supplies (including diesel and heating oil) were
down 1.05 million barrels last week, as against analysts'
expectations for a 1.1 million barrels gain in inventory level.
The decrease in distillate fuel stocks - the first in 6 weeks -
could be attributed to stronger demand, partially offset by
higher imports and production.
At 118.81 million barrels, distillate supplies are essentially
flat with the year-ago level but are in the lower limit of the
average range for this time of the year.
Refinery utilization was down 0.7% from the prior week to 87.3%.
The analysts were expecting the refinery run rate to increase
0.7% to 88.7%.
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).