The U.S. Energy Department's weekly inventory release showed that crude stockpiles fell unexpectedly as imports dropped, while gasoline and distillate both added to their supplies. Meanwhile, refiners enhanced processing rates by 1.2%.
The Energy Information Administration ("EIA") Petroleum Status Report – which contains data for the previous week ending on Friday, outlines information regarding the weekly change in petroleum inventories held and produced by the U.S., both locally and abroad.
The report provides an overview of the level of reserves and their movements, thereby helping investors understand the demand/supply dynamics of petroleum products. It is an indicator of current oil prices and volatility that affect businesses of companies engaged in the oil and refining industry, such as ExxonMobil (XOM), Chevron Corp. (CVX), ConocoPhillips (COP), Valero (VLO) and Tesoro (TSO).
Crude Oil
The federal government’s EIA report revealed that crude inventories shrank by 2.21 million barrels for the week ending August 19, 2011, after rising by 4.23 million barrels in the preceding week.
Analysts who had been surveyed by Platts, the energy information arm of McGraw-Hill Companies Inc. (MHP), had expected oil stocks to go up. A drop in imports and improved refinery operations led to the dip in stockpile with the world's biggest oil consumer. This was partially offset by the release of more crude from the U.S. Strategic Petroleum Reserve (“SPR”).
In particular, crude inventories at the Cushing terminal in Oklahoma – the key delivery hub for U.S. crude futures – came off 26,000 barrels from last week’s level to 33.66 million barrels, its lowest level since November 2010. Stocks reached an all-time high of 41.90 million barrels earlier this year.
At 351.77 million barrels, current crude supplies are 1.8% lower than the year-earlier level but are above the upper limit of the average for this time of the year. The crude supply cover was down from 22.9 days in the previous week to 22.6 days. In the year-ago period, the supply cover was 23.6 days.
Gasoline
Supplies of gasoline increased for the first time in three weeks on the back of higher import levels, improved production and weaker demand. The 1.36 million barrels-build – against projections for a drawdown – took gasoline stockpiles up to 211.44 million barrels. The existing inventory level is 6.3% below the year-earlier levels but is in the upper half of the average range.
Distillate
Distillate fuel inventories (including diesel and heating oil) were up by 1.73 million barrels last week, compared with analyst expectations for a smaller build. The increase in distillate fuel supplies can be attributed to higher production and imports, somewhat offset by stronger demand. At 155.70 million barrels, distillate supplies are 11.5% less than the year-ago level but are in the upper boundary of the average range at this time of the year.
Refinery Rates
Refinery utilization was up 1.2% from the prior week to 90.3%. Analysts were expecting the refinery run rate to decrease 0.2% to 88.9%.
CONOCOPHILLIPS (COP): Free Stock Analysis Report
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