The U.S. Energy Department's weekly inventory release showed
that crude stockpiles logged an unexpected decrease, as imports
fell even though production climbed to its highest level since
1992. The report further revealed that within the 'refined
products' category, gasoline stocks fell, while distillate
supplies were up from the week-ago levels. Meanwhile, refiners
scaled down their utilization rates by 0.5%.
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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 fell by 1.23 million barrels for the week ending Apr
12, 2013, following a climb of 250,000 barrels in the previous
The analysts surveyed by Platts - the energy information arm of
McGraw-Hill Companies Inc.
) - had expected crude stocks to go up some 1.25 million barrels.
A drop in the level of imports led to the surprise stockpile
drawdown with the world's biggest oil consumer even as refiners
reduced their utilization rates and domestic production continued
to spike, now at their highest level since 1992.
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 1.08 million barrels from the
previous week's level to 51.15 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 387.64 million barrels,
current crude supplies are 5.0% above the year-earlier level, and
comfortably exceed the upper limit of the average for this time
of the year.
Supplies of gasoline were down for the ninth time in 10 weeks
despite a decline in domestic consumption and rise in production.
The fall in gasoline inventories could be attributed to lower
The 633,000 barrels withdrawal - significantly below analysts'
projections for a 1.1 million-barrel decrease in supply level -
took gasoline stockpiles down to 221.73 million barrels.
Notwithstanding this drawdown, the existing inventory level of
the most widely used petroleum product is 3.6% higher than the
year-earlier level and is above the top half of the average
Distillate fuel supplies (including diesel and heating oil) were
up 2.36 million barrels last week, contrary to analysts'
expectations for a 850,000 barrels drop in inventory level. The
increase in distillate fuel stocks - the first in 5 weeks - could
be attributed to weaker demand and higher imports, partially
offset by lower production.
At 115.18 million barrels, distillate supplies are 10.7% below
the year-ago level and are in the lower limit of the average
range for this time of the year.
Refinery utilization was down 0.5% from the prior week to 86.3%.
The analysts were expecting the refinery run rate to increase
0.5% to 87.6%.
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).