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Markets

Huge Draw in Oil Inventories Fails to Arrest Selloff

Total crude oil and petroleum products stocks declined -9.10 mmb to 1106.40 mmb in the week ended November 12. Crude oil inventory plummeted -7.29 mmb, compared with consensus of a -1.20 mmb incrase, to 357.6 mmb as stockpile in Gulf Coast tumbled -6.81 mmb. Cushing stock, however, rose +1.27 mmb for the first time since July 30. Utilization rate climbed +1.6% to 84.0%.

Concerning oil products, both gasoline and distillate stockpiles declined during the week. Gasoline inventory fell-2.66 mmb to 207.68 mmb while that for distillate dipped -1.11 mmb to 158.79 mmb. Gasoline demand slipped -1.15% to 8.95M bpd but was offset by declines in imports (-29.93%) and production (-0.89%). Distillate demand contracted 13.97% to 3.78M bpd. While production climbed +1.65% to 4.31M bpd, imports halved to 0.09M bpd.

WTI crude oil jumped to as high as 82.43 immediately after the report. However, gains were pared as market sentiment remained fragile.

Weekly change in inventory as of 13/11/10 Actual Change Market Expectation Previous
Crude oil 357.60 mmb -7.29 mmb +1.20 mmb -3.27 mmb
Gasoline 207.68 mmb -2.66 mmb +0.65 mmb -1.92 mmb
Distillate 158.79 mmb -1.11 mmb -1.80 mmb -4.97 mmb

Comparison between API and EIA reports:

API (Nov 13) EIA (Nov 13)
Actual Inventory Previous Forecast (using API's inventory level) Inventory
Crude oil -7.65 mmb 352.5 mmb -7.40 mmb -12.33 mmb 353 mmb
Gasoline -1.50 mmb 214.8 mmb -3.99 mmb +4.46 mmb 215 mmb
Distillate +0.22 mmb 157.6 mmb -3.45 mmb -2.27 mmb 158 mmb

API collects stockpile information on a voluntary basis from operators of refineries, 76% of the time, using data in the past 4 years.

Source: Bloomberg, API, EIA

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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