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Platts analyzes US EIA oil stocks data

Platts reviews US EIA oil stocks data following a rise in crude stocks of 2.5 MMbbl last week
Platts analyzes US EIA oil stocks data

The US commercial crude oil stocks increased 2.5 MMbbl to 463.9 MMbbl in the week that ended 17 July, US Energy Information Administration (EIA) data showed Wednesday.

Analysts surveyed Monday by Platts expected a 1.9 MMbbl decline, consistent with the five-year average for the same reporting period.

Increased refinery activity to meet summer driving demand helped draw stockpiles lower. Refineries processed a record amount of crude oil for a second consecutive week, but inventories continued to build on the back of imports and production.

Crude oil imports increased 587,000 b/d to 7.9 million b/d, well above the year-to-date average of 7.251 million b/d.

By country of origin, the biggest increases were from Colombia, Ecuador, Kuwait and Nigeria, collectively rising 839,000 b/d.

Imports from Canada were down 354,000 b/d to 2.665 million b/d. Canadian imports had rebounded above 3 million b/d for the week ended 10 July, in line with the year-to-date average, as the country's production recovered from earlier wildfires in Alberta.

Most Canadian imports enter the US through the Midwest, where refinery activity continued to be strong. The region's utilization rate increased 3.4% to 97.5% of operable capacity.

The total refinery utilization rate increased 0.2% to 95.5% of operable capacity, as crude oil runs increased 45,000 b/d last week to 16.870 million b/d, a record, according to EIA data that goes back to 1982.

Analysts had expected the refinery utilization rate to decrease last week by 0.1%.

Refineries have had a strong financial incentive to run. Gasoline futures have held up well in the face of a softer crude oil market, pushing refining margins higher as a result.

The front-month New York Mercantile Exchange (NYMEX) reformulated blend stock for oxygenate blending (RBOB) gasoline crack against Intercontinental Exchange (ICE) Brent closed Friday at US$21.75/bbl. That was down from the eight-year high reached 9 July when the prompt RBOB crack reached $27.33/bbl, but was still above year-ago levels around $12/bbl.

On the US Gulf Coast (USGC), crude oil runs decreased 125,000 b/d last week to 8.733 million b/d, lowering the refinery utilization rate 1.6% to 96%.

A slowdown in USGC refinery activity helped push the region's crude stocks 2.5 MMbbl higher to 234.313 MMbbl, the largest build by region.

A reduction in USGC refining activity also puts upward pressure on stocks at Cushing, Oklahoma, delivery point for the NYMEX crude oil futures.

Cushing stocks increased for the fourth week in row, up 813,000 bbl to 57.9 MMbbl. The hub's storage remains below its historic peak reached in April of 62.2 MMbbl, but sits 39 MMbbl above the year-ago level.

Another factor exerting upward pressure on crude oil stocks has been production.

Weekly crude oil production dipped 4000 b/d last week to 9.558 million b/d, though the drop was limited to Alaska. Continental US production was unchanged at 9.104 million b/d, according to EIA estimates.

Continental production stands 12% above the year-ago level, despite NYMEX crude oil futures trading around $50/bbl, or half the level from last summer.

GASOLINE STOCKS FALL

Gasoline stocks decreased 1.7 MMbbl last week to 216.3 MMbbl, compared with analysts' expectations that inventories were unchanged.

By region, the biggest reduction occurred on the US Atlantic Coast (USAC), where stocks fell 1.3 MMbbl to 60.8 MMbbl, a 3.9% surplus to the five-year average for the same reporting period.

USAC gasoline stocks fell despite imports rising 79,000 b/d to 713,000 b/d, well above the year-to-date average of 592,000 b/d.

On the West Coast, stocks inched up 54,000 bbl to 27.2 MMbbl, but sit 4.2% below the five-year average for the same reporting period.

Gasoline implied demand decreased 345,000 b/d to 9.749 million b/d, representing a 10% surplus to the year-ago level.

Distillate stocks increased 235,000 bbl last week to 141.515 MMbbl, less than analysts' expectation of a 1.9 MMbbl increase.

Ultra-low sulfur diesel (ULSD) stocks jumped 848,000 bbl to 121.9 MMbbl, an all-time high for the fourth week in a row, according to EIA data going back to 2004.

By region, the biggest build was on the USAC, where stocks rose 720,000 bbl to 38.69 MMbbl, a 25.7% surplus to year-ago level.

Gulf Coast ULSD stocks increased 630,000 bbl to 37.32 MMbbl, a 12.6% surplus to the year-ago level.

 

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