The U.S. Energy Department's weekly inventory release showed
that crude stockpiles fell sharply, as imports declined. The
agency's report further revealed that within the 'refined products'
category, gasoline stocks edged up, while distillate supplies were
down from the week-ago levels. Meanwhile, refiners pulled back
their utilization rates by 0.6%.
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 4.27 million barrels for the week ending June 29, 2012,
following a decline of 133,000 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 2 million barrels. A dip
in the level of imports and production led to the stockpile
drawdown with the world's biggest oil consumer even as refiners
lowered their utilization rates.
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 - increased by 225,000 barrels from previous
week's level to 47.64 million barrels. Stocks are just under the
all-time high of 47.78 million barrels reached earlier in June.
At 382.90 million barrels, current crude supplies are 6.8% 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
24.8 days in the previous week to 24.5 days. In the year-ago
period, the supply cover was 23.6 days.
Supplies of gasoline increased for the third time in as many weeks
despite domestic consumption edging up 1.8% to 9.0 million barrels
a day. The rise in gasoline inventories could be attributed to
higher production and imports.
The 151,000 barrels gain - compared to analyst projections for
an unchanged supply level - took gasoline stockpiles up to 204.97
million barrels. Notwithstanding this increase, existing inventory
level of the most widely used petroleum product is still 3.5% off
the year-earlier levels and is below the lower limit of the average
Distillate fuel supplies (including diesel and heating oil)
decreased by 1.05 million barrels last week, contrary to analyst
expectations for a 500,000 barrels build. The fall in distillate
fuel stocks - the third decline in 4 weeks - could be attributed to
stronger demand and lower imports, partially offset by higher
At 117.80 million barrels, distillate supplies are 17.1% 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 0.6% from the prior week at
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