Analysis of US EIA data: US crude oil stocks jump 9 million barrels on imports boost
New York - April 4, 2012
US crude oil stocks climbed 9 million barrels for the week that ended March 30 on a surge in imports, mainly from Iraq, and an uptick in refinery run rates, data Wednesday from the U.S. Energy Information Administration (EIA) showed.
At 362.399 million barrels, crude stocks were more than 17,000 barrels greater than the five-year average and about 4.7 million barrels more than the same period in 2011.
The figure far outpaced analyst expectations of a 1.9 million-barrel build and was more than 15% higher than the American Petroleum Institute's (API) late Tuesday data showing a 7.8 million-barrel rise in crude stocks.
Stocks were boosted by a 505,000 barrels-per-day (b/d) increase in U.S. crude imports to 9.774 million b/d, with the bulk of the rise coming from Iraq, EIA data showed.
Iraqi imports climbed 494,000 b/d to 569,000 b/d. The EIA's weekly data does not break down country of origin imports by region of entry. However, monthly data from the EIA shows the bulk of Iraqi barrels entering via the U.S. Gulf Coast (USGC).
Imports from Kuwait climbed 321,000 b/d to 616,000 b/d, while imports from Angola of 318,000 b/d rose from zero the prior week. The bulk of crude oil imports from both countries typically enter through the USGC, where stocks rose 6.1 million barrels last week.
Inventories in the U.S. Gulf Coast have been running below their five year average, but that gap is narrowing. Stocks last week were 0.74% below the five-year average, compared to 7.42% below the beginning of March.
Meanwhile, imports from Canada jumped 296,000 b/d to 2.569 million b/d, the EIA data showed.
At the same time, U.S. refiners increased their utilization rates by 1.2 percentage points to 85.7% of capacity, with inputs up 299,000 b/d to 14.750 million b/d.
SEAWAY PIPELINE REVERSAL
Crude stocks rose 1.5 million barrels in the Midwest, while inventories at Cushing, Oklahoma, the delivery point for New York Mercantile Exchange (NYMEX) crude oil futures contracts, climbed 729,000 barrels to 40.293 million barrels, having risen by about 11 million barrels since the start of the year. Stocks at the Cushing hub hit their highest level since the week ending April 29, 2011.
Analysts have attributed the rise in Cushing stocks to the planned reversal of the Seaway pipeline this summer, which will change flow directions from northerly to southerly, and run from Cushing to Freeport, Texas.
The Seaway line will offer an initial 150,000 b/d of line space on June 1 and then will increase to 400,000 b/d in early 2013. By mid-2014, capacity on the line will be expanded by another 450,000 b/d, to more than 850,000 b/d.
The EIA also reported U.S. crude production at 6.049 million b/d last week, up from 5.821 million b/d the prior week. However, the increase did not reflect a week-on-week rise in production, said James Beck, lead analyst for the EIA’s weekly petroleum supply team. Rather, the weekly number was adjusted higher to reflect revised monthly output figures.
In refined products, U.S. gasoline stocks fell 1.457 million-barrels to 221.913 million barrels, EIA data showed. Distillate stocks were near flat at 135.885 million barrels, up 19,000 barrels from the prior week.
Analysts anticipated a 1.6 million-barrel draw in gasoline inventories and a 600,000-barrel draw in distillate stocks.
Small increases in gasoline stocks on the Atlantic Coast -- home of the New York delivery point for RBOB -- and the Midwest were offset by a 1.6 million-barrel draw on the Gulf Coast and a 300,000-barrel decline on the West Coast.
BLENDING COMPONENTS
Imports of total motor gasoline rose 321,000 b/d to 885,000 b/d, led by a 262,000 b/d increase in imports on the Atlantic Coast. The majority of total U.S. gasoline imports were blending components, which rose to 703,000 b/d from 508,000 b/d the week prior, of which 619,000 b/d was seen on the Atlantic Coast.
Beck said the import surge may be related to a delay in reporting finished gasoline imports into the U.S., and noted that based on the four-week average the gasoline import increase was not out of the ordinary.
One a four-week average, U.S. total gasoline imports were down 173,000 b/d from the same four-week period in 2011.
With refining dwindling on the Atlantic Coast, Beck said it was not usual that imports of blending components into the U.S. would be on the rise.
U.S. gasoline implied* demand on a four-week moving average was 8.554 million b/d, marking the second consecutive week of increase. Based on a four-week average, demand is 2.27% below year-ago levels, compared to the 6.08% year-on-year under performance two weeks ago. That calculation, however, factors in higher 2011 gasoline exports than the EIA’s original report, which essentially lowered the 2011 implied demand figures.
Distillate fuel demand was near flat at 3.597 million b/d last week, while overall, total petroleum demand fell 18,000 b/d to 18.186 million b/d.
* Implied demand is the amount of product that moves through the U.S. distribution system, not actual end consumption.
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