Analysis of US EIA data: Gasoline inventories decline on demand rebound
New York - April 13, 2011
US gasoline stocks fell seven million barrels to 209.679 million barrels for the week ending April 8, with a rebound in demand keeping inventories on a downward trajectory, an analysis of the data released Wednesday by the US Energy Information Administration (EIA) showed. Analysts polled by Platts had projected a more modest decline of 1.25 million barrels.
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.
At 209.679 million barrels for the latest reporting week, gasoline stocks were 11.659 million barrels below year-ago levels and 941,000 barrels below the five-year average. This marks the first time inventories have moved to a deficit against the five-year average since June 09, 2009. In the past two months, U.S. gasoline stocks have dropped 31.417 million barrels.
Gasoline demand rebounded 328,000 barrels per day (b/d) to 9.181 million b/d despite retail prices rising to levels last seen in 2008. Demand, on a four week moving average basis, was 8.994 million barrels per day. This is down from 9.132 million b/d last year and suggests high prices may be affecting consumer's discretionary spending patterns.
A drawdown in gasoline inventories occurred in every region except the West Coast.
Implied demand* for US petroleum products, except propane and propylene, bounced back in the latest reporting week. US oil demand edged up 75,000 b/d to 19.258 million b/d, with a combined drop in demand of 269,000 b/d for propane and propylene capping a week-over-week increase in consumption.
US product stocks fell 6.578 million barrels to 678.119 million barrels, leaving inventories 10.203 million barrels greater than the five-year average but 17.187 million barrels less than year-ago levels. A steady pace of demand amid low refiner output has caused U.S. product stocks to drop 50.281 million barrels since end 2010.
Crude stocks rose 1.627 million barrels to 359.291 million barrels, inline with analyst expectations. Analysts polled by Platts had anticipated a 1.6-million-barrel build in crude stocks.
At 359.291 million barrels, US crude stocks were 16.899 million barrels greater than the five-year average and 5.328 million barrels less than the same period a year ago.
Gross refinery inputs dropped 439,000 b/d to 14.406 million b/d, with the Atlantic and Gulf coast activity accounting for a large portion of the decline. Inputs on the Atlantic Coast declined 228,000 b/d to 615,000 b/d, the lowest level since EIA started releasing this particular piece of data in 1990. Sunoco's Marcus Hook, Pennsylvania refinery, with capacity of 175,000 b/d, suffered a power outage on March 28. According to a state official Monday, the refinery’s fluid catalytic cracker (FCC) only came back online sometime last week.
Meanwhile, gross inputs by Gulf Coast refineries decreased 176,000 b/d to 7.537 million b/d. BP's 475,000-barrel-per-day facility in Texas City, Texas that also experienced a downed FCC and crude unit is expected to restart this week, one source said Monday.
The 3% drop in refinery inputs to 81.4% was enough to offset the 379,000-barrel-per-day decline in imports, resulting in an inventory build. Imports fell to 8.571 million b/d, with both the Atlantic and West coasts accounting for the majority of the decline.
As a result of exceptionally low refinery inputs on the Atlantic Coast, crude stocks there increased 1.042 million barrels to 12.899 million barrels.
More importantly, crude stocks at Cushing, Oklahoma – the delivery point for New York Mercantile Exchange (NYMEX) crude oil futures contracts – edged up 26,000 barrels to 41.896 million barrels. This marked an all-time high and moderated gains in light sweet futures prices compared to Brent.
* Implied demand is the amount of product that moves through the US 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. If you require any additional information or would like to interview Linda Rafield, please e-mail Kathleen Tanzy.
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