The U.S. Energy Department's weekly inventory release showed
that crude stockpiles jumped to hit their highest level since
1990. However, the report further revealed that refined product
inventories - gasoline and distillate - declined from their
previous week levels. Meanwhile, refiners scaled up their
utilization rates by 0.6%.
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 rose by 2.71 million barrels for the week ending Mar
29, 2013, following a climb of 3.26 million barrels in the
The analysts surveyed by Platts - the energy information arm of
McGraw-Hill Companies Inc.
), had expected crude stocks to go up some 2.5 million barrels.
Strong domestic production led to the stockpile build-up with the
world's biggest oil consumer even as imports fell and refinery
utilization rates improved.
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 - was down 287,000 barrels from the
previous week's level to 49.18 million barrels. Stocks are
currently just under the all-time high of 51.86 million barrels
reached in January.
Following the weekly inventory increase, at 388.62 million
barrels, current crude supplies are 7.2% 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 26.9
days in the previous week to 26.6 days. In the year-ago period,
the supply cover was 25.0 days.
Supplies of gasoline were down for the eighth time in as many
weeks, as domestic consumption strengthened and production fell.
This was partially offset by higher imports.
The 580,000 barrels withdrawal - way off analysts' projections
for a 1.25 million-barrel decrease in supply level - took
gasoline stockpiles down to 220.66 million barrels. Following
this drawdown, the existing inventory level of the most widely
used petroleum product is 0.5% lower than the year-earlier level
despite being in the middle of the average range.
Distillate fuel supplies (including diesel and heating oil) were
down 2.27 million barrels last week, significantly above
analysts' expectations for a 1 million barrels drop in inventory
level. The decrease in distillate fuel stocks - the fourth in 5
weeks - could be attributed to lower imports, partially offset by
weaker demand and higher production.
At 112.99 million barrels, distillate supplies are 16.8% below
the year-ago level and are close to the lower limit of the
average range for this time of the year.
Refinery utilization was up 0.6% from the prior week to 86.3%.
The analysts were expecting the refinery run rate to increase
0.5% to 86.2%.
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).
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