U.S. Crude Inventories Down Again - Analyst Blog

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The U.S. Energy Department's weekly inventory release showed a small drawdown in crude stockpiles. The agency's report further revealed that within the 'refined products' category, gasoline stocks dropped, while distillate supplies were up from the week-ago levels. Meanwhile, refiners pulled back their utilization rates by 0.7%.

The Energy Information Administration (EIA) Petroleum Status Report, which contains data for the previous week ending Friday, outlines information regarding the weekly change in petroleum inventories held and produced by the U.S., both locally and abroad.

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 businesses of companies engaged in the oil and refining industry, such as ExxonMobil Corp. ( XOM ), Chevron Corp. ( CVX ), ConocoPhillips ( COP ), Valero Energy Corp. ( VLO ) and Tesoro Corp. ( TSO ).

Analysis of the Data

Crude Oil: The federal government's EIA report revealed that crude inventories fell by 809,000 barrels for the week ending July 13, 2012, following a plunge of 4.70 million barrels the week before.

Analysts surveyed by Platts, the energy information arm of McGraw-Hill Companies Inc. ( MHP ), had expected oil stocks to go down some 1.4 million barrels. Lingering impact of production shutdowns caused by the recent storm activity led to the fourth consecutive weekly stockpile drawdown 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 - decreased by 500,000 barrels from previous week's level to 46.28 million barrels. Stocks are just under the all-time high of 47.78 million barrels reached earlier in June.

At 377.39 million barrels, current crude supplies are 7.3% above the year-earlier level, and are over the upper limit of the average for this time of the year. The crude supply cover was flat from the previous week at 24.1 days. In the year-ago period, the supply cover was 22.9 days.

Gasoline: Supplies of gasoline decreased for the first time in 5 weeks despite domestic consumption edging down 3.2% to 8.63 million barrels a day. The fall in gasoline inventories could be attributed to lower production and imports.

The 1.82 million barrels drop - contrary to analyst projections for a 700,000 barrels increase in supply level - took gasoline stockpiles down to 205.91 million barrels. As result of this decrease, existing inventory level of the most widely used petroleum product is now 3.1% off the year-earlier levels and is in the lower limit of the average range.

Distillate: Distillate fuel supplies (including diesel and heating oil) jumped by 2.62 million barrels last week, exceeding analyst expectations for a 1 million barrels build. The rise in distillate fuel stocks - the second in as many weeks - could be attributed to higher production. This was partially offset by stronger demand and lower imports.

At 123.53 million barrels, distillate supplies are 16.8% below the year-ago level and are in the lower limit of the average range for this time of the year.

Refinery Rates: Refinery utilization was down 0.7% from the prior week at 92.0%.


 
CONOCOPHILLIPS (COP): Free Stock Analysis Report
 
CHEVRON CORP (CVX): Free Stock Analysis Report
 
MCGRAW-HILL COS (MHP): Free Stock Analysis Report
 
TESORO CORP (TSO): Free Stock Analysis Report
 
VALERO ENERGY (VLO): Free Stock Analysis Report
 
EXXON MOBIL CRP (XOM): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: COP , CVX , EIA , MHP , TSO

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