Analysis of US EIA data: Crude oil stocks plummet on steady refinery inputs
New York - December 15, 2010
US crude oil stocks plummeted 9.854 million barrels to 346.018 million barrels as refinery inputs held steady the week ending December 10. This came as imports plunged, and after data for the week ending Dec. 3 showed a huge jump in refinery inputs, as end-of-year tax considerations kicked in, an analysis of the oil data released Wednesday by the Energy Information Administration (EIA) 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 Oilgram Price Report.
Historically, refiners and producers are prone to working off inventories to lighten end-of-year tax payments.
The decline in inventories was particularly heavy along the Gulf Coast where stocks fell 9.021 million barrels to 173.369 million barrels. But even on the Atlantic Coast, stocks dropped 722,000 barrels, sending inventories to an all-time-low of 9.314 million barrels. Crude stocks on the West Coast also took a hit, falling 1.17 million barrels to 54.323 million barrels.
Only the Midwest region saw a crude stock build of 1.195 million barrels, climbing to 92.788 million barrels while inventories at Cushing, Oklahoma – home of the New York Mercantile Exchange (NYMEX) crude oil futures contract delivery point – increased 982,000 barrels to 35.911 million barrels, the fourth consecutive build in that region.
Imports were the swing factor for the crude data. A combination of tax considerations and two occasions during the reporting period of Mexican port closures that would have curtailed imports were the driving factors.
Crude imports dropped 1.363 million barrels per day (b/d) to 7.69 million b/d, the lowest level since the week ending September 19, 2008. The largest decline in imports was along the West Coast where imports decreased 512,000 b/d to 801,000 b/d, and unwinding the previous report's increase. One cargo can swing import data along the East Coast and West Coast given limited refining capacity in those regions.
At 346.018 million barrels, US crude stocks were 25.58 million barrels above the five-year average and 13.631 million barrels above year-ago levels. These are the narrowest surpluses against the averages in five months.
Despite a build of 809,000 barrels in gasoline stocks to 214.773 million barrels and an increase of 1.094 million barrels in middle distillates to 161.305 million barrels, US product stocks continued their downward trajectory, led by declines in jet fuel, residual fuel oil and "other oils.”
US product stocks fell 5.781 million barrels to 739.136 million barrels, leaving inventories 33.634 million barrels above the five-year average, but 2.066 million barrels below year-ago levels.
Net product imports were down 414,000 b/d to 136,000 b/d week-over-week while demand rose 204,000 b/d to 20.200 million b/d – the first time US consumption has breached the 20-million-b/d mark since the week ending May 28, 2010. Gains in demand were concentrated in gasoline, jet fuel and distillates.
*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. If you require any additional information or would like to interview Linda Rafield, please e-mail Kathleen Tanzy.
# # #
About Platts: Platts, a division of The McGraw-Hill Companies (NYSE: MHP), is a leading global provider of energy and commodities information. With a century of business experience, Platts serves customers across more than 150 countries. An independent provider, Platts serves the oil, natural gas, electricity, emissions, nuclear power, coal, petrochemicals, shipping, and metals markets from 17 offices worldwide. Platts' real-time news, pricing, analytical services and conferences help markets operate with transparency and efficiency.
About The McGraw-Hill Companies: Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a global information and education company providing knowledge, insights and analysis in the financial, education and business information sectors through leading brands including Standard & Poor's, McGraw-Hill Education, Platts, and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2009 were $5.95 billion Additional information is available at www.mcgraw-hill.com.