EIA analysis: firing away at the nation’s refineries

Refineries are starting to crank away, particularly in the US West Coast, where they’re operating at rates not seen for more than two years.

US crude oil stocks down on boosted refinery rates, lower imports

New York - December 19, 2012

U.S. commercial crude oil stocks fell 964,000 barrels to 371.645 million barrels the reporting week ended December 14, according to the weekly U.S. Energy Information Administration (EIA) data.

The decline in crude stocks was largely a factor of decreased imports and increased refinery runs.

Despite the week-on-week decline, U.S. crude stocks are 15.42% above the EIA’s five-year average, and over 48,000 barrels more than year-ago levels.

Analysts polled Monday by Platts expected crude stocks to decline by 2.3 million barrels.

The stock draw was most acutely felt on the U.S. Gulf Coast, where crude stocks fell 1.655 million barrels to 176.665 million barrels on the combined effect of decreased imports and increased refinery runs. Regional imports fell 163,000 barrels per day (b/d) to 4.372 million b/d, and gross refinery inputs jumped 97,000 b/d to 8.419 million b/d. Gulf Coast refinery utilization rose to 1.1 percentage points to 96.5% of capacity.

With Gulf Coast operable refining capacity at 8.725 million b/d, last week's increase pushes regional run rates to the highest level since June 2010, when EIA began reporting region-specific refinery utilization data.

The Gulf Coast draw was mild by comparison to the EIA five-year average, which shows regional stocks seasonally fall by over 5 million barrels for this reporting week.

Total U.S. refinery utilization rose 1.1 percentage points to 91.5% of capacity, as gross refinery inputs rose 201,000 b/d to 15.918 million b/d, the highest since the reporting week ended August 10.

The Platts survey of analysts expected U.S. refinery utilization to have remained flat.

Meanwhile, the large Gulf Coast draw was offset somewhat by a 1.690 million-barrel increase in Midwest crude stocks, which rose to 111.098 million barrels.

Imports to the Midwest surged 197,000 b/d to 1.671 million b/d, largely due to a 357,000-b/d increase in Canadian imports, which rose to 2.333 million b/d.

Crude stocks at Cushing, Oklahoma – delivery point for the New York Mercantile Exchange (NYMEX) crude futures contract – rose 145,000 barrels to 46.963 million barrels.

Imports to the Atlantic Coast also surged, rising 154,000 b/d to 1.041 million b/d. However, regional crude stocks fell 192,000 barrels to 10.499 million barrels.

U.S. gasoline stocks, meanwhile, rose a bearish 2.207 million barrels to 219.322 million barrels. Analysts surveyed expected US gasoline stocks to have grown by 2 million barrels.

The week-on-week increase marked the fourth consecutive build in U.S. gasoline stocks, which have risen from 200.39 million barrels from the reporting week ended November 16.

The build in gasoline stocks was led by the Gulf Coast, where stocks rose 2.185 million barrels to 80.578 million barrels. This is the largest Gulf Coast stocks have been since February 2011.

However, stocks in the Atlantic Coast -- home to the New York Harbor-delivered NYMEX RBOB contract -- fell 445,000 barrels to 49.127 million barrels.

U.S. implied demand* for gasoline rose 130,000 b/d last week to 8.618 million b/d, EIA data showed.

Meanwhile, implied demand for US distillates rose even further, up 714,000 b/d to 4.214 million b/d. A spike this time of year is typical, with distillate demand reaching 4.4 million b/d in mid-December 2011.

This uptick in demand brought total U.S. distillate stocks down 1.085 million barrels to 116.97 million barrels last week. Analysts surveyed expected US distillate stocks to grow by 1.5 million barrels.

The largest declines were seen in Gulf Coast stocks, which fell 2.653 million barrels to 34.043 million barrels, largely a product of a steep decline in Gulf Coast ultra low sulfur diesel (USLD) stocks, which fell 2.764 million barrels to 25.643 million barrels.

The declines were offset by a sharp rise in Atlantic Coast ULSD stocks, which rose 2.7 million barrels to 20.109 million barrels. Atlantic Coast heating oil stocks, however, fell 1.723 million barrels to 18.291 million barrels, lowest since August 3.

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