Analysis of U.S. EIA data: Crude oil and gasoline builds: neutral to bearish
New York - March 31, 2010
Weekly U.S. petroleum statistics released Wednesday by the U.S. Energy Information Administration (EIA) largely landed within seasonal ranges, with the exception a surprising counter-seasonal gasoline build.
U.S. crude oil stocks climbed 2.92 million barrels in the reporting week ending March 26 to 354.189 million barrels, in line with analysts' expectations ahead of the data for a 2.65 million-barrel build.
The build in oil stocks occurred despite a fall in crude imports, and put total stocks at a 10-month high.
Crude stocks saw a build in all regions except for the disconnected West Coast. The total build was also the ninth consecutive rise reported by the EIA.
Inventories at Cushing, Oklahoma, the delivery point of the New York Mercantile Exchange (NYMEX) crude oil futures contracts, increased by 400,000 barrels to 30.90 million barrels. U.S. Gulf Coast (PADD III) stocks continued to rise as well. At 187.218 million barrels, they gained 1.225 million barrels the week ending March 26, standing at the highest level since June 12, 2009.
U.S. crude imports fell 337,000 barrels per day (b/d) to 9.060 million b/d last week, the EIA reported.
Imports have fallen below the five-year average since the week ending October 16, 2009, on the back of a slowdown in the economy despite the prior week's sharp rise on a week-to-week basis. As of the week ending March 26, crude imports were lagging the five-year average level by 967,400 b/d.
In products, the EIA reported a counter-seasonal gasoline build of 224,872 barrels, putting total stocks at 224,872 million barrels, which is above the higher end of the five-year range.
On a regional basis, the build in stocks was driven from a 1.50 million-barrel rise in stocks on the U.S. Gulf Coast (PADD III), outweighing declines in all other major consuming centers, particularly a 700,000-barrel decline on the East Coast.
A significant gain in refinery utilization, or run rates, also helped production of gasoline and distillates, particularly on the U.S. Gulf Coast.
The EIA reported that refineries operated at 82.6% of their operable capacity, up 1.5 percentage points from the week ending March 26’s data and compared with analysts' expectations of a 0.15 percentage point rise.
As greater-than-expected refineries returned back from maintenance, production values exhibited gains as well.
Total U.S. gasoline production was up 12,000 b/d at 9.03 million b/d, highest level so far this year, and 108,000 b/d higher than the high of the five-year average.
Meanwhile, gasoline imports also increased, helping to explain the build in stocks. Imports averaged 710,000 b/d, up 87,000 b/d.
In distillates, the EIA reported a more seasonal draw of 1.085 million barrels last week at 144.60 million barrels. "The market could be somewhat disappointed with the reported increase in the refinery operating rate, since production restraint has been an important support for heating oil prices," Tim Evans, analyst at Citi Futures Perspectives said in a report.
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