The U.S. Energy Department's weekly inventory release showed
that crude stockpiles increased, as production climbed to its
highest level in 18 years. The report further revealed that
refined product inventories - gasoline and distillate - decreased
from their previous week levels, as demand strengthened.
Meanwhile, refiners scaled up their utilization rates by 0.6%.
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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 rose by 1.09 million barrels for the week ending
November 9, 2012, following a climb of 1.77 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 1.5 million barrels.
Continued spike in domestic production - now at their highest
level since May 1994 - led to the stockpile build-up 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 - edged up by 715,000 barrels
from the previous week's level to 43.68 million barrels. Stocks
are currently just under the all-time high of 47.78 million
barrels reached in June.
At 375.94 million barrels, current crude supplies are 11.5% 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
up from 25.4 days in the previous week to 25.5 days. In the
year-ago period, the supply cover was 23.1 days.
Supplies of gasoline were down for the first time in 5 weeks, as
domestic consumption jumped 7.2% to 8.91 million barrels a day.
The 440,000 barrels drop - compared to analyst projections for an
unchanged supply level - took gasoline stockpiles down to 201.94
million barrels. As a result of this decrease, the existing
inventory level of the most widely used petroleum product is now
1.6% off the year-earlier levels and is in the middle of the
Distillate fuel supplies (including diesel and heating oil)
dropped by 2.54 million barrels last week, much higher than
analysts' expectations for a 500,000 barrels decrease in
inventory level. The sharp decline in distillate fuel stocks -
the eighth in 9 weeks - could be attributed to stronger demand,
partially offset by higher imports.
At 115.52 million barrels, distillate supplies are 13.6% 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 0.6% from the prior week to 86.0%, in
line with analysts' expectations.