Platts analysis of U.S. EIA oil stocks data: U.S. gasoline stocks drop on lower inputs, imports

New York, NY - April 29, 2009

U.S. gasoline inventories declined 4.695 million barrels to 212.612 million barrels last week, as a combination of declining output and a drop-off in imports sorely eroded the stock surplus compared to historical averages, according to an analysis of the weekly oil data from the U.S. Energy Information Administration.

At 212.612 million barrels, gasoline stocks were 7.734 million barrels more than the five-year average and 1.523 million barrels greater than year-ago levels.

Refiners throttled back output of gasoline, with production falling 298,000 barrels per day (b/d) to 8.79 million b/d. This is a sign that there may have been maintenance issues at some plants, because the crack spread was still at levels that made gasoline production profitable. The crack spread is the difference between the price of raw crude and the price of the refined product that can be made from that crude. The New York Mercantile Exchange (NYMEX) June RBOB crack spread averaged $11.33 per barrel the week ending April 24.

While output fell, imports also declined, dropping 276,000 b/d to 841,000 b/d. Low refiner output has been a response to a slowdown in gasoline demand.

On a week-over-week basis, implied gasoline demand edged up just 15,000 b/d to 9.151 million b/d. But on a four-week moving average, implied gasoline demand was 0.1 percentage point lower than the previous week. At 9.064 million b/d, it was down 0.5% from year-ago levels. Implied demand is the amount of product that moves through the US distribution system, not actual end consumption.

While a decline in inventories is a seasonal occurrence at this time of year--as product starts to move out of primary storage through the distribution system ahead of the start of driving season--this week's decrease appeared related to refinery issues involving fluid catalytic crackers rather than a climb in consumption.

Overall, crude fundamentals continued to deteriorate as stocks jumped another 4.053 million barrels to 374.653 million barrels, the highest level since the week ending August 31, 1990.

Yet, the EIA data showed U.S. commercial crude stocks were 3.17 million barrels lower than the American Petroleum Institute's inventory level of 377.823 million barrels.

The stock-building trend remained intact as crude imports stayed at sufficiently high levels, while at the same time refinery inputs continued to decline. Crude imports were down just 31,000 b/d at 9.824 million b/d, while inputs were 14.334 million b/d, allowing for inventory increases. Crude inputs edged down 182,000 b/d with declines occurring in several regions.

Adding to overall bearishness of the data was another consecutive stock build at the NYMEX oil futures contract delivery point in Cushing, Oklahoma. Stocks at Cushing rose 221,000 barrels to 29.763 million barrels, 10.466 million barrels above year-ago levels.

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