Analysis of US EIA data: US crude oil imports hit six-year high, stocks soar
New York - July 28, 2010
U.S. crude oil imports hit a six-year high of 11.153 million barrels per day (b/d) in the week ending July 23, contributing to an unexpected 7.308-million-barrel build in stocks, an analysis of oil data from the U.S. Energy Information Administration (EIA) showed Wednesday. This analysis and commentary is provided by Linda Rafield, Platts senior oil analyst and editor of the weekly Platts Futures and Derivatives Review, a supplement to Platts Oilgram Price Report.
Analysts polled by Platts projected a draw of 2.3 million barrels in U.S. crude stocks.
Gulf Coast crude imports hit an all-time high of 7.212 million b/d, climbing 1.728 million b/d week-over-week in what appeared to be a bunching of cargoes that suddenly landed, a not unusual occurrence at this time of year given hurricanes and tropical storms. Gulf Coast crude stocks soared 8.184 million barrels to 184.575 million barrels while inventories on the West Coast fell 4.416 million barrels to 49.438 million barrels.
Imports into the Midwest edged down 30,000 b/d to 1.373 million b/d, while inputs to refiners dropped 37,000 b/d to 3.436 million b/d. Stocks in the Midwest increased 1.872 million barrels to 97.413 million barrels, but inventories at Cushing, Oklahoma – the delivery point for New York Mercantile Exchange (NYMEX) oil futures contracts – inched up just 66,000 barrels to 37.17 million barrels, just 775,000 barrels off the all-time high seen the weak ending May 14. The build at the delivery point comes as a surprise given the narrowing of the front of the futures curve over the past six weeks and despite stocks holding steady at Cushing.
While refiner demand for crude barrels held at a steady 15.462-million-b/d level, implied demand* for product jumped 438,000 b/d to 19.822 million b/d, led by gasoline.
Gasoline demand climbed 197,000 b/d to 9.632 million b/d, the highest level since August 24, 2007, just shortly before the recession started in December 2007.
Soaring gasoline demand kept the inventory build to a modest 91,000 barrels in comparison to expectations for an increase of 1.1 million barrels. At 222.245 million barrels, gasoline stocks were 12.754 million barrels above the five-year average and 9.169 million barrels above year-ago levels.
But total product inventories have been unchanged for the past six weeks with stocks at 726.589 million barrels, 10.063 million barrels above the five-year average, but 48.711 million barrels below year-ago levels.
Demand for product is significantly higher from last week’s report, prompted by gasoline needs. Gasoline and other product demand on a four-week average is 19.385 million barrels per day or 642,000 b/d greater than this same time a year ago.
Demand for middle distillates also moved higher week-over-week, jumping 241,000 b/d to 3.599 million b/d, which are fairly impressive demand readings given the recent erratic incoming economic data. Higher demand for middle distillates has slowed the rate of stock-building. Stocks of middle distillates climbed 938,000 barrels to 167.513 million barrels. The build in middle distillates was nearly evenly spread between ultra-low sulfur diesel and heating oil.
*Implied demand is the amount of product that moves through the U.S. distribution system, not actual end consumption.
*Editor’s Note: Linda Rafield’s commentary is based on her knowledge of market trends, information from industry sources, and her own views as a long-time energy analyst. Please contact Kathleen Tanzy if you require any additional information or would like to interview Linda Rafield.
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