The U.S. Energy Department's weekly inventory release showed
that crude stockpiles logged a surprise decline, as imports fell.
The report further revealed that refined product inventories -
gasoline and distillate - decreased from their previous week
levels. Meanwhile, refiners scaled up their utilization rates by
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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 1.47 million barrels for the week ending
November 16, 2012, following a climb of 1.09 million barrels in
the previous week.
The analysts surveyed by Platts - the energy information arm of
McGraw-Hill Companies Inc.
), had expected oil stocks to go up some 1 million barrels. An
uptick in refinery utilization rates and lower imports led to the
stockpile drawdown with the world's biggest oil consumer.
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 - jumped 1.47 million barrels from the
previous week's level to 45.15 million barrels. Stocks are
currently just under the all-time high of 47.78 million barrels
reached in June.
At 374.47 million barrels, current crude supplies are 13.2% 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 25.5 days in the previous week to 25.4 days. In the
year-ago period, the supply cover was 22.6 days.
Supplies of gasoline were down for the second time in as many
weeks despite domestic consumption declining marginally. The fall
in gasoline inventories could be attributed to plummeting Gulf
The 1.55 million barrels drop - compared to analyst projections
for a 1.25 million barrels increase in supply level - took
gasoline stockpiles down to 200.39 million barrels. As a result
of this decrease, the existing inventory level of the most widely
used petroleum product is now 4.4% 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 2.67 million barrels last week, much higher than
analysts' expectations for a 1 million barrels decrease in
inventory level. The sharp decline in distillate fuel stocks -
the ninth in 10 weeks - could be attributed to stronger demand
and lower imports, partially offset by higher production.
At 112.84 million barrels, distillate supplies are 15.2% 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 1.5% from the prior week to 87.5%.
The analysts were expecting the refinery run rate to go up by