The U.S. Energy Department's weekly inventory release showed
that crude stockpiles logged another decline, as refiners scaled
up their utilization rates. The report further revealed that
refined product inventories - gasoline and distillate - increased
from their previous week levels, as demand weakened.
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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 2.36 million barrels for the week ending
November 30, 2012, following a drop of 347,000 barrels in the
The analysts surveyed by Platts - the energy information arm of
McGraw-Hill Companies Inc.
), had expected oil stocks to go down some 1.25 million barrels.
An uptick in refinery utilization rates led to the stockpile
drawdown with the world's biggest oil consumer even as imports
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 down 226,000 barrels
from the previous week's level to 45.63 million barrels. Stocks
are currently just under the all-time high of 47.78 million
barrels reached in June.
At 371.77 million barrels, current crude supplies are 10.6% 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 25.2 days in the previous week to 24.7 days. In the
year-ago period, the supply cover was 22.7 days.
Supplies of gasoline were up for the second time in as many
weeks, as domestic consumption fell, while production and imports
The 7.86 million barrels jump - far outpacing analysts'
projections for a 2 million barrels increase in supply level -
took gasoline stockpiles up to 212.12 million barrels. However,
notwithstanding this build, the existing inventory level of the
most widely used petroleum product is still 1.4% off the
year-earlier levels and is in the upper half of the average
Distillate fuel supplies (including diesel and heating oil)
gained 3.03 million barrels last week, much higher than analysts'
expectations for an 800,000 barrels increase in inventory level.
The sharp rise in distillate fuel stocks - the first in 4 weeks -
could be attributed to weaker demand and improved production,
partially offset by lower imports.
At 115.07 million barrels, distillate supplies are 18.4% 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 2.0% from the prior week to