Analysis of US EIA data: Gasoline Stocks unexpectedly drop as demand jumps
New York - October 27, 2010
A climb in demand was behind the unexpected draw in U.S. gasoline stocks which dropped 4.387 million barrels the week ending October 22, an analysis of the data released Wednesday by the Energy Information Administration showed. This analysis and commentary is provided by Linda Rafield, Platts senior oil analyst and editor of the weekly Futures and Derivatives Review, a supplement to Platts Oilgram Price Report.
Analysts polled by Platts projected gasoline stocks to build by 900,000 barrels.
At 214.942 million barrels, gasoline stocks were still 14.901 million barrels above the five-year average and 6.378 million barrels above year-ago levels.
The stock draw in gasoline occurred in every U.S. region.
Implied demand* jumped 466,000 barrels per day (b/d) week-over-week to 9.358 million b/d, a level normally seen during peak driving season. On a four-week moving average, gasoline demand at 9.013 million b/d was still 70,000 b/d below year-ago levels.
The 120,000-b/d increase in gasoline imports to 999,000 b/d only tempered the draw in stocks.
The build of 5.007 million barrels in crude stocks was as bearish as the 4.387 million barrel draw in gasoline inventories was bullish.
A build in crude stocks was seen across the board in every region, including the Atlantic Coast. Inventories on the Atlantic Coast climbed 882,000 barrels to 52.609 million barrels with crude inputs in that region falling 44,000 b/d to 821,000 b/d.
Stocks at Cushing, Oklahoma – home of the New York Mercantile Exchange (NYMEX) crude oil futures contracts delivery point – decreased 351,000 barrels to 33.659 million barrels, a six-and-one-half month low.
Crude imports rebounded by 863,000 b/d to 9.463 million b/d with every region seeing an increase except the Atlantic Coast. Gulf Coast crude imports surged 1.143 million b/d to 5.9 million b/d, likely reflecting the closure of the Houston Ship Channel two weeks ago that waylaid tankers. Atlantic Coast crude imports declined 479,000 b/d to 718,000 b/d, but given limited refining capacity along there, one or two fewer cargoes can radically change the import number.
The 863,000 b/d increase in crude imports more than offset a 171,000 b/d jump in refinery inputs to 14.138 million b/d.
Like gasoline, implied demand for middle distillates also climbed. Demand for middle distillates rose 111,000 b/d to 4.064 million b/d, a five-month high. On a four-week moving average, demand for middle distillates at 3.862 million b/d was 310,000 b/d above year-ago levels.
The increase in demand contributed to the 1.613 million barrel decrease in stocks. Both inventories of ultra-low sulfur diesel and heating oil declined week-over-week. Stocks of ultra-low sulfur diesel edged down 439,000 barrels to 104.606 million barrels while inventories of heating oil fell 917,000 barrel to 53.388 million barrels. Cooler temperatures along the Atlantic Coast likely caused an increase in deliveries of heating oil.
For more information on crude oil, visit the Platts website.
*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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