Platts analysis of U.S. EIA oil stocks data: Weak demand keeps relentless stock-building intact
New York, NY - April 1, 2009
U.S. commercial crude oil stocks continued a relentless stock-building trend, increasing another 2.844 million barrels to 359.427 million barrels the week ending March 27, an analysis of data released Wednesday by the U.S. Energy Information Administration (EIA) showed.
At 359.427 million barrels, U.S. commercial crude stocks were 38.639 million barrels greater than the five-year average and 40.263 million barrels higher year on year. The 2.844-million-barrel increase in crude stocks kept inventories at nearly a 16-year high.
A combination of higher domestic production, an increase in imports and low refiner demand was behind the stock build.
Stocks on the Gulf Coast increased 2.3 million barrels as imports in that region climbed. Total U.S. imports were up 170,000 barrels per day (b/d) to 9.554 million b/d. Along the Gulf Coast, imports rose 133,000 b/d to 5.984 million b/d, potentially signaling that floating storage is making its way onto land.
Despite the overall stock build, inventories at Cushing, Oklahoma -- home of the New York Mercantile Exchange futures contract delivery point -- declined 856,000 barrels to 30.853 million barrels. This is the lowest crude stocks at Cushing have been since the end of December.
U.S. domestic production edged up 48,000 b/d to 5.48 million b/d, the highest level since July 2005.
Inventories of every refined product also increased as total U.S. demand fell back below 19 million b/d. On a four-week moving average, total U.S. petroleum demand of 18.865 million b/d was 4.4% below year-ago levels and down 1.2 percentage points from the previous EIA report.
Gasoline demand turned negative year-over-year for the first time since the start of 2009, contributing to a 2.225 million barrel build in gasoline stocks. On a four-week moving average, implied gasoline demand at 9.038 million b/d was 0.2% below year-ago levels. Implied demand is the amount of product that moves through the U.S. distribution system; it is not actual end consumption.
Distillate demand continued to suffer from a slowing economy; at 3.772 million b/d on a four-week moving average, it was 9.1% below year-ago levels. Weak demand for middle distillates resulted in a 221,000-barrel build in inventories, contrary to analyst expectations of a draw of 1.4 million barrels.
Jet fuel stocks edged up 200,000 barrels to 39.5 million barrels; residual fuel oil inventories climbed 800,000 barrels to 35.5 million barrels; stocks of propane and propylene rose 700,000 barrels to 38.4 million barrels and inventories of other oils climbed 700,000 barrels to 129.7 million barrels. The only product stock to decline was unfinished oils which fell 1.2 million barrels to 88 million barrels. Total U.S. oil stocks, excluding the U.S. government's Strategic Petroleum Reserve (SPR), which received another 1.7 million barrels of crude, increased 6.4 million barrels to 1,051.5 million barrels. The SPR is a "social safety net" of petroleum supply.