Analysis of US EIA data: Gasoline stocks fall to deficit against year-ago levels
New York - November 10, 2010
US gasoline stocks dropped a steeper-than-expected 1.917 million barrels the week ending November 5, according to data released Wednesday by the Energy Information Administration (EIA). This drop caused inventories to fall to a deficit against year-ago levels for the first time since July 2009. 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.
At 210.336 million barrels, gasoline stocks were 9.454 million barrels above the five-year average, but 501,000 barrels below year-ago levels.
The decline in gasoline inventories was concentrated on the Atlantic Coast and Midwest. Atlantic Coast stocks fell 1.241 million barrels to 50.464 million barrels, a two-year low, while inventories in the Midwest dropped 1.037 million barrels to 51.02 million barrels. The decline on the East Coast and Midwest occurred despite an increase in gross inputs, suggesting refiners favored yields of heavier products; production of jet fuel and residual fuel oil was up week-over-week.
Gasoline output was up 30,000 barrels per day (b/d) to 9.011 million b/d during the November 5 reporting week.
Continued low imports, which may have resulted from the port and refinery strikes in France, have sorely eroded gasoline stocks in the US Gasoline imports declined 69,000 b/d to 802,000 b/d, but on a four-week moving average, at 863,000 b/d they were 59,000 b/d above year-ago levels when demand was at a very low level.
Gasoline demand at 9.056 million b/d on a four-week moving average, was 212,000 b/d above year-ago levels.
While gasoline demand edged higher week-over-week, up 41,000 b/d at 9.056 million b/d, demand for middle distillates climbed 288,000 b/d to 4.394 million b/d.
The increase in demand for middle distillates contributed to a 4.972 million barrel stock draw. At 159.902 million barrels, middle distillates were 22.831 million barrels above the five-year average, but 7.823 million barrels below year-ago levels.
Stocks of ultra-low sulfur diesel dropped 3.478 million barrels to 97.721 million barrels, and this is the first time inventories have fallen below 100 million barrels in four months. The decline in ultra-low sulfur diesel inventories occurred on the Atlantic Coast, Gulf Coast and West Coast. Stocks of heating oil fell 1.991 million barrels to 51.181 million barrels.
Total US product stocks dropped 8.54 million barrels to 750.625 million barrels, and have declined a cumulative 34.96 million barrels since hitting a record high seven weeks ago. Low refiner output, below-average imports and potentially high exports have been behind a tightening in supply/demand balances.
Crude stocks also declined, falling 3.274 million barrels in contrast to analyst expectations for a 2.1 million barrel build. At 364.882 million barrels, U.S. crude stocks were 40.548 million barrels above the five-year average and 27.206 million barrels above year-ago levels.
Adding to the bullish tone of the overall report, stocks at Cushing, Oklahoma – home of the New York Mercantile Exchange (NYMEX) crude oil futures contracts delivery point – dropped 1.746 million barrels to a seven-month low of 31.799 million barrels. A 489,000 b/d decrease in imports to 8.089 million b/d and a 153,000 barrel increase in inputs to refineries were likely behind the drop in crude stocks. This is a 10-month low in crude imports. A 415,000 b/d drop in imports on the West Coast represented the bulk of the decline and imports on the Gulf Coast decreased 208,000 b/d to 4.802 million b/d, an eight-month low.
*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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