The U.S. Energy Department's weekly inventory release showed
that crude stockpiles fell sharply, as imports declined and
refinery activity rose. The agency's report further revealed that
refined product inventories - gasoline and distillate - increased
from their previous week levels on weaker demand.
The Energy Information Administration (EIA) Petroleum Status
Report, which contains data for 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 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 4.70 million barrels for the week ending July 06, 2012,
following a decline of 4.27 million barrels the week before.
Analysts surveyed by Platts, the energy information arm of
McGraw-Hill Companies Inc.
), had expected oil stocks to go down some 1.5 million barrels. A
decline in the level of imports and higher refinery activity led to
the stockpile drawdown 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 - decreased by 859,000 barrels
from previous week's level to 46.78 million barrels. Stocks are
just under the all-time high of 47.78 million barrels reached
earlier in June.
At 378.20 million barrels, current crude supplies are 6.4% above
the year-earlier level, and are over the upper limit of the average
for this time of the year. The crude supply cover was down from
24.5 days in the previous week to 24.1 days. In the year-ago
period, the supply cover was 23.3 days.
Supplies of gasoline increased for the fourth time in as many weeks
as domestic consumption edged down and imports rose.
The 2.75 million barrels gain - way beyond analyst projections
for a 600,000 barrels increase in supply level - took gasoline
stockpiles up to 207.73 million barrels. Notwithstanding this
increase, existing inventory level of the most widely used
petroleum product is still 1.9% off the year-earlier levels and is
in the lower limit of the average range.
Distillate fuel supplies (including diesel and heating oil) jumped
by 3.11 million barrels last week, exceeding analyst expectations
for a 1 million barrels build. The rise in distillate fuel stocks -
the first in 3 weeks - could be attributed to weaker demand and
At 120.91 million barrels, distillate supplies are 16.6% below
the year-ago level and are under the lower limit of the average
range for this time of the year.
Refinery utilization was up 0.7% from the prior week at 92.7%.
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