New York (Platts)--19May2009

US gasoline stocks fell by a larger-than-expected 1.954 million barrels
to 206.186 million barrels the week ending May 15, a seasonal occurrence, as
production declined and demand jumped, an analysis of the American Petroleum
Institute's data showed Tuesday.

At 206.186 million barrels, gasoline stocks were 5.027 million barrels
below year-ago levels.

Gasoline production edged down 35,000 b/d to 9.084 million b/d as
refinery utilization fell further. Refinery utilization fell 1.3 percentage
points to 80.6%, an abnormally low level for this time of year.

But with widespread demand deterioration, refiners have had little reason
to up run rates.

Nevertheless, gasoline demand jumped 280,000 b/d week-over-week to 9.557
million b/d, an exceptionally high level, as product was probably moving
through the distribution system ahead of the Memorial Day weekend, which is
the start of driving season. Gasoline demand on a four-week moving average was
9.277 million b/d and, thus far for the month of May, was running 1.6% above
year-ago levels. Gasoline is the only product category sporting year-over-year
positive demand growth.

An increase of 232,000 b/d of gasoline imports to 1.108 million b/d was
insufficient to offset the climb in demand.

While gasoline imports rose, crude imports were essentially flat,
remaining at sub-9 million b/d levels and causing stocks to fall further.
Crude stocks fell an unexpectedly large 4.468 million barrels to 366.221
million barrels. But at 366.221 million barrels, US crude stocks were 49.268
million barrels above year-ago levels. Crude imports languished at 8.833
million b/d, which was 343,000 b/d below year-ago levels, no surprise given
low inputs.

Stocks at the NYMEX delivery point in Cushing, Oklahoma, dropped another
698,000 barrels to 24.029 million barrels and justifying the continued
strengthening in the front of the futures curve. But API' Cushing stock levels
have consistently run below those reported by the US Energy Information
Administration.

Middle distillates rose 1.412 million barrels to 145.779 million
barrels, but this a category that is rarely a headline grabber at this time of
year. Middle distillate stocks were still 36.357 million barrels above
year-ago levels as demand continued to reel from the slow state of the US
economy.

--Linda Rafield, linda_rafield@platts.com