US crude oil stocks edge higher; product demand slides to 13-year lowAnalysis of EIA dataNew York - February 8, 2012US crude oil stocks inched up 304,000 barrels to 339.246 million barrels during the week that ended February 3, as a product demand hit a 13-year record low despite increased refinery rates, data Wednesday from the U.S. Energy Information Administration (EIA) showed. The EIA’s reported crude oil stock rise is far from figures released a day earlier from the American Petroleum Institute (API), which showed a 4.5-million-barrel draw in crude inventories, and much less than analyst expectations of a 2.25-million-barrel build. Refiners raised utilization rates by 1.0 percentage point to 82.8% of capacity for the week ending February 3, after reducing rates for three consecutive weeks. But softening product demand, which fell 86,000 barrels per day (b/d) to its lowest level since the week ending May 14, 1999, at 17.618 million b/d, offset the run-rate rise. The EIA revised its product demand figure for the week ending January 27 to 17.704 million barrels from a previous 17.653 million barrels. Offsetting a larger rise in stocks was a 467,000-b/d decline in crude imports to 8.413 million b/d. Midwest crude stocks climbed 1.298 million barrels to 95.648 million barrels last week, as refiners in the area reduced runs for the second week in a row. Refiners processed 3.404 million b/d of crude, less than 47,000 b/d on the week, and 102,000 b/d fewer than the week ending January 20, the EIA data showed.That left Midwest refiners operating at 91.8% of capacity the week ending February 3, down from 94.5% the week ending January 20. Midwest crude imports – the bulk of which come from Canada – fell 116,000 b/d last week to 1.434 million b/d. That was down 324,000 b/d from a recent peak of 1.758 million b/d the week ending January 6. Some of the drop in refinery runs was likely due to maintenance. Late last week, BP took a fluid catalytic cracking unit down at its 405,000 b/d Whiting, Indiana, refinery. That unit returned Sunday, but may have been reflected in the EIA data. Also, Midwest refiners were likely cutting runs, and thus imports, in response to high product inventories. Midwest refining margins have improved lately, but primarily because of a widening of the New York Mercantile Exchange’s (NYMEX) West Texas Intermediate crude oil futures price discount to the IntercontinentalExchange’s Brent crude. Product prices in the Midwest have been cheap, relative to Gulf Coast and Atlantic Coast prices, because of the refined product glut. For instance, conventional grade gasoline in Chicago was assessed Tuesday at $2.7376 per gallon (/gal), 21.75 cents/gal under the Gulf Coast. Likewise, ultra low sulfur diesel (ULSD) in Chicago was assessed at $2.9848/gal Tuesday, 17.85 cents/gal under the Gulf Coast. The Midwest product surplus has deteriorated somewhat the past few weeks on the drop in runs. Midwest ULSD stocks at 31.937 million barrels the week ending February 3 were 7.36% greater than the five-year average, down from a 17.21% surplus in mid-January. Midwest gasoline stocks at 56.448 million barrels were up 426,000 barrels on the week, but were just 2.83% above the five-year average. At Cushing, Oklahoma – delivery point of the NYMEX crude oil futures contracts – stocks were up 367,000 barrels to 30.490 million barrels and about 2.2 million barrels above the five-year average. PRODUCT STOCKS DECLINE U.S. gasoline stocks rose 1.629 million barrels to 231.776 million barrels last week, just above analyst expectations of a 1.25-million-barrel build but less than the 4.429-million-barrel build reported by the API late Tuesday. On the Atlantic Coast – home of the NYMEX-delivered RBOB contract – stocks edged up a marginal 7,000 barrels to 62.633 million barrels but still reached a high not seen since March 4, 2011. Demand for finished gasoline was 8.039 million b/d last week, up from a revised 8.018 million b/d the week prior. The EIA had previously reported gasoline demand at 7.967 million b/d for the week ending January 27, which would have been its weakest level since just after the September 11, 2001, terror attacks. Still, gasoline demand is 830,000 b/d less than the five-year average. Stocks of U.S. distillates rose 1.174 million barrels to 146.584 million barrels last week, EIA data showed. This is counter to analysts’ expectations of a 200,000-barrel decline. Distillates demand softened, falling 300,000 b/d to 3.436 million b/d, after shedding 150,000 b/d during the prior reporting week. The bulk of the inventory rise came from the Gulf Coast, where distillate stocks were up 1.9 million barrels. On the Atlantic Coast, distillate stocks fell 900,000 barrels to 51.3 million barrels, while heating oil stocks in that region rose 400,000 barrels. Total stocks of ULSD also increased, rising 500,000 barrels. # # # About Platts: Founded in 1909, Platts is a leading global provider of energy, petrochemicals and metals information and a premier source of benchmark prices for those markets. Platts' news, pricing, analytics, commentary and conferences help customers make better-informed trading and business decisions and help the markets operate with greater transparency and efficiency. Customers in 150 countries benefit from Platts’ coverage of the oil, petrochemicals, natural gas, electricity,coal, nuclear power, shipping, and metals markets. A division of The McGraw-Hill Companies, Platts has approximately 900 employees in more than 15 offices worldwide.
To subscribe or visit go to: http://www.platts.com |