Analysis of U.S. EIA data
New York - April 7, 2010
U.S. crude oil stocks climbed 1.976 million barrels to 356.165 million barrels the week ending April 2 as a jump in crude imports trumped a rise in refinery runs, data released by the U.S. Energy Information Administration (EIA) showed Wednesday.
Crude imports were up 501,000 barrels per day (b/d) at 9.561 million b/d, while crude inputs rose 370,000 b/d to 14.604 million b/d.
Crude stocks were up across the U.S., with the exception of the West Coast (PADD V), which saw a 418,000 barrel draw to 52.55 million barrels. The largest build was seen in the U.S. Gulf Coast (PADD III), where stocks climbed 1.187 million barrels to 188.405 million barrels, the result of an 858,000 b/d rise in imports to 6.06 million b/d.
Stocks at Cushing, Oklahoma -- home of the New York Mercantile Exchange (NYMEX) light sweet crude oil futures contract delivery point -- were up 300,000 barrels at 31.2 million barrels, which could widen the NYMEX contango* further. The front-month crude spread price settled at minus 55 cents/barrel (cents/b) on Tuesday, compared to minus 29 cents/b on March 19.
The U.S. crude stock build looked slightly bearish for NYMEX crude prices, as analysts polled by Platts earlier in the week were expecting a 1.5 million barrel build.
Also bearish was a 1.07-million-barrel build in U.S. distillate stocks to 145.68 million barrels. Analysts were looking for a 1.5 million barrel draw, in keeping with seasonal trends.
The build was the result of a sudden jump in distillate production, to 4.042 million b/d from 3.575 million b/d. The rise in stocks and production was primarily seen in low and ultra low sulfur diesel. U.S. distillate demand fell slightly, to 3.637 million b/d from 3.646 million b/d. That was well below the five-year average of 4.218 million b/d, and is a bearish consideration for the NYMEX heating oil futures contract.
U.S. gasoline demand, however, was a bit higher, up 16,000 b/d at 9.076 million b/d, the EIA data showed. That put demand above last year's 9.024 million b/d, and slightly below the five-year average of 9.192 million b/d.
The rise in demand helped push U.S. gasoline stocks 2.498 million barrels lower to 222.374 million barrels the week ending April 2.
Analysts had been looking for a 1 million barrel draw. Despite the large stock draw, the surplus against the five-year average grew to 8.777 million barrels, from 8.41 million barrels the week ending March 26, and 5.796 million barrels the week ending March 12.
*Contango is the industry vernacular for the condition whereby prices for nearby delivery are lower than prices for future-month delivery.
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