The U.S. Energy Department's weekly inventory release showed
that crude stockpiles logged another increase to hit their
highest level since June last year, as refiner demand weakened.
The report further revealed that within the 'refined products'
category, gasoline stocks fell, while distillate supplies were up
from the week-ago levels.
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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 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 2.62 million barrels for the week ending Mar
08, 2013, following a climb of 3.83 million barrels in the
The analysts surveyed by Platts - the energy information arm of
McGraw-Hill Companies Inc.
), had expected oil stocks to go up some 2.3 million barrels. A
drop in refinery utilization rates, together with an uptick in
the level of imports and domestic production led to the eighth
straight weekly stockpile build-up with the world's biggest oil
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 1.53 million barrels from the
previous week's level to 49.32 million barrels. Stocks are
currently just under the all-time high of 51.86 million barrels
reached in January.
At 383.98 million barrels, current crude supplies are 10.5% 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 26.7 days in the previous week to 27.1 days. In the
year-ago period, the supply cover was 23.7 days.
Supplies of gasoline were down for the fifth time in as many
weeks, as domestic consumption strengthened. This was partially
offset by higher production and imports.
The 3.57 million barrels withdrawal - significantly above
analysts' projections for a 1.5 million barrels decrease in
supply level - took gasoline stockpiles down to 224.31 million
barrels. Following this drawdown, the existing inventory level of
the most widely used petroleum product is 1.7% lower than the
year-earlier level despite being in the middle of the average
Distillate fuel supplies (including diesel and heating oil) were
up 83,000 barrels last week, contrary to analysts' expectations
for a 2 million barrels drop in inventory level. The increase in
distillate fuel stocks - the second in 3 weeks - could be
attributed to weaker demand, as well as higher imports, partially
offset by lower production.
At 120.44 million barrels, distillate supplies are 10.7% below
the year-ago level and are in the lower limit of the average
range for this time of the year.
Refinery utilization edged down 1.2% from the prior week to
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).