Analysis of US EIA data: US oil stocks at an all-time high
New York - September 9, 2010
US oil stocks edged up 196,000 barrels to an all-time high of 1.144 billion barrels the week ending September 3, despite a steady tone to demand, an analysis of data released Wednesday by the Energy Information Administration (EIA) showed.This analysis and commentary is provided by Linda Rafield, Platts senior oil analyst and editor of the weekly Futures and Derivatives Review, a supplement to Platts Oilgram Price Report.
US oil stocks were 99.67 million barrels above the five-year average and 47.514 million barrels above year-ago levels. However, this week's build was entirely concentrated in propane, propylene and "other oils."
Of the 1.144 billion barrels of oil stockpiled in the US, excluding the Strategic Petroleum Reserve, 783.687 million barrels were product inventories. Also a record-setting amount, this quantity of product inventories is a sign that projected demand growth for 2010 failed to live up to expectations while refiners took advantage of attractive margins and pumped out product.
US oil demand at 19.634 million barrels per day (b/d) on a four-week moving average was at its highest level in 13 weeks, but the acceleration in demand has been in residual fuel oil, propane and propylene.
While total oil stocks rose for the eighth consecutive week, the headline categories – crude oil, gasoline and middle distillates – declined.
U.S. crude stocks dropped 1.853 million barrels to 359.854 million barrels with imports declining 794,000 b/d to 8.853 million b/d as Hurricane Earl appeared to waylay cargoes along the Atlantic Coast and Gulf Coast. Crude imports fell 159,000 b/d to 1.073 million b/d on the Atlantic Coast while imports on the Gulf Coast declined 966,000 b/d to an abnormally low 4.938 million b/d. This week's data suggests imports will roar back in the next set of numbers, and unwinding the crude stock draw.
"The PADD II import drop was partly due to the Enbridge situation and also the short-term shutdown of the Keystone Line," said James Beck, lead analyst of the weekly petroleum supply team at the EIA. PADD II represents the U.S. Midcontinent. Enbridge's Line 6B has been shut since late July due to a leak near Marshall, Michigan. "Over the past four weeks of that situation, imports were down to 1.2 million from 1.3 million and are now at 1.1 million to 1.0 million. Part of that is the disruption of the line also Keystone was down part of last week." TransCanada's 2,147-mile Canada-U.S. Keystone crude pipeline resumed service this Wednesday, a week after it was shut for inspections.
Gasoline inventories fell 243,000 barrels to 225.162 million barrels with a drop-off in imports along the Atlantic Coast behind the decline. At 225.162 million barrels, gasoline stocks were 28.26 million barrels above the five-year average and 18.009 million barrels above year-ago levels. Gasoline imports on the East Coast declined 117,000 b/d to 821,000 b/d, again, as cargoes were prevented from landing due to weather conditions.
Inventories of middle distillates inched down 388,000 barrels to 174.847 million barrels, the second consecutive week stocks fell with the draw concentrated in diesel.
**Editor’s Note: Linda Rafield’s commentary is based on her knowledge of market trends, information from industry sources, and her own views as a long-time energy analyst. Please contact Kathleen Tanzy if you require any additional information or would like to interview Linda Rafield.
# # #
About Platts: Platts, a division of The McGraw-Hill Companies (NYSE: MHP), is a leading global provider of energy and commodities information. With a century of business experience, Platts serves customers across more than 150 countries. An independent provider, Platts serves the oil, natural gas, electricity, emissions, nuclear power, coal, petrochemicals, shipping, and metals markets from 17 offices worldwide. Platts' real-time news, pricing, analytical services and conferences help markets operate with transparency and efficiency. Traders, risk managers, analysts, and industry leaders depend upon Platts to help them make better trading and investment decisions.
About The McGraw-Hill Companies: Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor's, McGraw-Hill Education, Platts, Capital IQ, J.D. Power and Associates, McGraw-Hill Construction and Aviation Week. The Corporation has more than 280 offices in 40 countries. Sales in 2008 were $6.4 billion. Additional information is available at www.mcgraw-hill.com.