Analysis of U.S. EIA data: crude oil stocks unexpectedly drop as imports plunge
New York - January 27, 2010
U.S. commercial crude oil stocks dropped 3.888 million barrels to 326.667 million barrels as imports fell 673,000 barrels per day (b/d) to 7.867 million b/d the week ending January 22, the lowest level since March 2003, analysis of the data released Wednesday by the Energy Information Administration (EIA) showed.
At 326.677 million barrels, U.S. commercial crude stocks were 12.054 million barrels above the five-year average, but 12.204 million barrels below year-ago levels. This was the narrowest surplus against the five-year average in 14 months.
Crude imports averaged 8.434 million b/d the first three weeks in January, 1.334 million b/d below the same three weeks 2009. The decline in crude imports was concentrated in the Gulf Coast and Atlantic Coast regions, where imports fell 638,000 b/d and 262,000 b/d, respectively. A 298,000 b/d increase in imports into the Midwest was able to temper the overall decline in import levels.
While the Houston Ship Channel was closed for 24 hours January 20-21, the exceptionally low level of imports was also a reflection of languid demand for finished product.
Crude inputs were down 200,000 b/d to 13.624 million b/d the reporting week ending January 22. For the first three weeks of January runs of 13.818 million b/d were 471,000 b/d below year-ago levels.
Implied demand* at 18.752 million b/d for the first three weeks in January was running 544,000 b/d below year-ago levels. On a four-week moving average, implied petroleum demand at 18.753 million b/d was 376,000 b/d below year-ago levels, or down 2%.
While demand for most refined product was steady week-over-week, implied demand for middle distillates slipped 98,000 b/d as warmer-than-normal temperatures along the Atlantic Coast caused demand for heating oil to wane. Heating oil stocks edged up 317,000 barrels to 41.185 million b/d while inventories of ultra low sulfur diesel climbed 1.282 million barrels to 100.082 million barrels.
The dip in demand for middle distillates combined with soaring imports caused stocks to build 358,000 barrels to 157.496 million barrels, which was 23.759 million barrels above the five-year average and 13.544 million barrels above year-ago levels. Analysts polled by Platts expected a draw of 1.8 million barrels. Imports of middle distillates surged 386,000 b/d to 658,000 b/d, a nearly four-year high in imports.
Imports of gasoline also climbed, edging up 93,000 b/d to 823,000 b/d and contributing to a 1.985 million-barrel build in gasoline stocks, in line with analysts' expectations.
* Implied demand is the amount of product that moves through the U.S. distribution system, not actual end consumption.
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