Analysis of US EIA data: US distillate stocks drop sharply; crude stocks rise: EIA

New York - October 11, 2012

U.S. distillate stocks fell 3.177 million barrels to 120.882 million barrels for the reporting week ended October 5, U.S. Energy Information Administration (EIA) data showed Thursday.Analysts polled by Platts expected U.S. distillate stocks to decline, but by a much smaller 400,000 barrels.

The American Petroleum Institute (API) reported Wednesday that U.S. distillate stocks fell 6.2 million barrels.

The sharp decline puts U.S. distillate stocks 20.18% below the EIA five-year average, and more than 33,000 barrels below year-ago levels.

The drop in distillates was split relatively evenly between ultra-low sulfur diesel (ULSD) stocks and heating oil stocks. U.S. ULSD stocks fell 1.833 million barrels to 82.297 million barrels, while heating oil stocks fell 1.577 million barrels to 25.807 million barrels.

Regional declines in overall distillate stocks were led by a 1.786 million-barrel decline in U.S. Atlantic Coast stocks, which fell to 39.362 million barrels. Atlantic Coast heating oil stocks fell 940,000 barrels to 19.159 million barrels, putting them 47% below the EIA five-year average.

Much of this decline was felt in the key Central Atlantic sub-region, where heating oil stocks fell 1.252 million barrels to 11.788 million barrels.

U.S. Midwest ULSD stocks fell 978,000 barrels to 25.359 million barrels, likely due to the ongoing U.S. harvest season, according to Price Futures Group energy analyst Phil Flynn.

U.S. distillate demand fell 270,000 barrels per day (b/d) to 3.822 million b/d, EIA data showed.

Meanwhile, U.S. crude stocks rose 1.672 million barrels to 366.370 million barrels, in line with analysts' expectations. The week-on-week change shows crude stocks remain amply supplied, sitting 10.45% above the EIA five-year average.

The rise was led by a 792,000-barrel increase in U.S. Gulf Coast stocks, which rose to 179.071 million barrels.

Midwest crude stocks rose 681,000 barrels to 105.973 million barrels. Stocks at Cushing, Oklahoma – the transit and delivery hub for the New York Mercantile Exchange (NYMEX) crude oil futures contract – rose 300,000 barrels to 44.165 million barrels.

U.S. crude oil imports rose 115,000 b/d to 8.221 million b/d, and gross inputs to U.S. refineries fell 127,000 b/d to 15.075 million b/d, pushing refinery utilization rates 1.5 percentage points lower to 86.7% of capacity.

U.S. gasoline stocks fell 534,000 barrels to 195.408 million barrels, led by a 1.028 million-barrel decline in Atlantic Coast stocks, which fell to 45.118 million barrels. The decline puts U.S. gasoline stocks 3.9% below the EIA five-year average, while on the Atlantic Coast, the deficit to the five-year average grew to 13.62%.

This was offset somewhat by a 1.998 million-barrel increase in Gulf Coast gasoline stocks, which rose to 69.407 million barrels.

Analysts polled expected U.S. gasoline stocks to remain unchanged.

The EIA data was released Thursday, a day later in the week than normal, due to the Columbus Day holiday Monday.

* Implied demand is the amount of product that moves through the U.S. distribution system, not actual end consumption.

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