The U.S. Energy Department's weekly inventory release showed a small stockpile increase. The report further revealed that within the 'refined products' category, gasoline stocks reflected a surprise build, while distillate supplies were down from the week-ago level. Meanwhile, refiners scaled up their utilization rates.
Following EIA's less-than-expected crude build report, oil recovered from its sub-$40 levels with the West Texas Intermediate (WTI) crude futures inching up 0.2% to settle at $40.75 per barrel Wednesday.
Despite the moderately bullish data, the commodity's stock remains at levels not seen since the 1930s in the face of weak global consumption. As a result, oil - which was hovering around $110 per barrel just over a year ago - is now struggling to stay above $40. In between, it sunk to a 6½-year low of $38 a barrel.
Analysis of the Data
Crude Oil: The federal government's EIA report revealed that crude inventories edged up by a nominal 252,000 barrels for the week ending Nov 13, 2015, following an increase of 4.22 million barrels in the previous week.
The analysts surveyed by Platts - the energy information arm of McGraw-Hill Financial Inc. - had expected crude stocks to go up by much bigger 1.1 million barrels. The size of the stockpile build with the world's biggest oil consumer was limited by the improvement in refinery usage and lower 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 - were up 1.5 million barrels from the previous week's level to 56.85 million barrels.
Following the eighth successive weekly inventory rise, at 487.29 million barrels, current crude supplies are up 27.9% from the year-ago period and are near the highest level during this time of the year in 80 years at least.
The crude supply cover was down from 31.2 days in the previous week to 30.8 days. In the year-ago period, the supply cover was 24.5 days.
Gasoline: Supplies of gasoline were up for the first time in 6 weeks, as demand weakness more than offset the fall in production. The 1 million barrels rise - contrary to analysts' projections for a 1.2 million barrels decrease in supply level - took gasoline stockpiles up to 214.25 million barrels. Following last week's build, the existing stock of the most widely used petroleum product is 4.7% higher than the year-earlier level and sits comfortably above the upper limit of the average range.
Distillate: Distillate fuel supplies (including diesel and heating oil) were down 791,000 barrels last week, slightly higher than analysts' expectations for a 700,000 barrels fall in inventory level. The decrease in distillate fuel stocks - the eighth in 9 weeks - could be attributed to strengthening demand. But at 140.32 million barrels, distillate supplies are still 22.2% above the year-ago level and are in the middle of the average range for this time of the year.
Refinery Rates: Refinery utilization was up 0.8% from the prior week to 90.3%, essentially in line with analyst expectations.
About the Weekly Petroleum Status Report
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 abroad.
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.
The data from EIA generally acts as a catalyst for crude prices and affect producers, such as Exxon Mobil Corp. XOM , Chevron Corp. CVX and ConocoPhillips COP , and refiners such as Valero Energy Corp. VLO , Phillips 66 PSX and HollyFrontier Corp. HFC .