The U.S. Energy Department's weekly inventory release showed
that crude stockpiles increased, as imports climbed and refinery
demand weakened. The report further revealed that refined product
inventories - gasoline and distillate - dropped from their week-ago
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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 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
Valero Energy Corp.
Analysis of the Data
The federal government's EIA report revealed that crude inventories
rose by 1.67 million barrels for the week ending October 5, 2012,
following a slide of 482,000 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. An
uptick in the level of imports and drop in refinery utilization
rates led to the stockpile build-up with the world's biggest oil
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 300,000 barrels from
the previous week's level to 44.17 million barrels. Stocks are
currently just under the all-time high of 47.78 million barrels
reached in June.
At 366.37 million barrels, current crude supplies are 8.5% above
the year-earlier level, and exceeds the upper limit of the average
for this time of the year. The crude supply cover was unchanged
from the previous week at 24.8 days. In the year-ago period, the
supply cover was 22.5 days.
Supplies of gasoline decreased for the tenth time in 11 weeks
despite domestic consumption declining marginally. The fall in
gasoline inventories could be attributed to plummeting imports and
The 534,000 barrels drop - compared to analyst projections for an
unchanged supply level - took gasoline stockpiles down to 195.41
million barrels. As a result of this drawdown, the existing
inventory level of the most widely used petroleum product is now
6.8% off the year-earlier levels and is near the lower limit of the
Distillate fuel supplies (including diesel and heating oil) dropped
by 3.18 million barrels last week, much higher than analyst
expectations for a 400,000 barrels decrease in inventory level. The
fall in distillate fuel stocks - the fourth in as many weeks -
could be attributed to lower production, partially offset by higher
imports and weaker demand.
At 120.88 million barrels, distillate supplies are 21.5% below the
year-ago level and are under the lower limit of the average range
for this time of the year.
Refinery utilization was down 1.5% from the prior week to