Platts analysis of U.S. EIA oil stocks data
New York, NY - June 10, 2009
U.S. petroleum product demand climbed 1.046 million barrels per day (b/d) to 18.725 million b/d in the week ended June 5, rebounding from a 10-year low the week earlier, an analysis of Wednesday's weekly U.S. Energy Information Administration (EIA) petroleum data report shows.
On a four-week moving average, total U.S. petroleum product demand at 18.347 million b/d was 1.357 million b/d less than year-ago levels, a contraction of 6.9%, according to EIA. But on a week-over-week basis, total U.S. oil demand improved by 0.8 percentage point from the EIA's previous report.
A pick-up in demand was seen across every product category with residual fuel oil and propane and propylene seeing the sharpest gains.
The increase in demand was still not sufficient to prevent total U.S. product inventories from extending the stock-building trend. Total U.S. product inventories increased 2.7 million barrels to 739.1 million barrels. At 739.2 million barrels, total U.S. product stocks were 70.466 million barrels greater than the five-year average and 72.7 million barrels more than year-ago levels. But the bulk of the increase in product inventories was concentrated in "other oils," which translates to feedstock.
Gasoline stocks declined 1.553 million barrels to 201.649 million barrels and middle distillate inventories dropped 318,000 barrels to 149.718 million barrels. At 201.649 million barrels, U.S. gasoline stocks were 7.617 million barrels fewer than the five-year average and 8.439 million barrels less than w year-ago levels.
U.S. gasoline stocks have now declined a cumulative 15.658 million barrels over the past five weeks, the result of both lower-than-trend seasonal production declines and the seasonal pick up in demand this time of year with the summer drive season under way. There was also a drop in gasoline imports.
Gasoline imports fell 77,000 b/d to 872,000 b/d while demand climbed 121,000 b/d to 9.141 million b/d. The week-over-week increase in gasoline demand pushed the four-week moving average up to 9.233 million b/d, 0.4% above year-ago levels and the only product to sport positive growth year-over-year. The pick-up in gasoline demand occurred despite rising retail prices at the pump. EIA reported retail gasoline prices averaged $2.6240 per gallon (/gal) the week ending June 8, a 1-cent increase week-over-week, but $1.415/gal less than year-ago levels. Retail gasoline prices were still $1/gal higher than levels prevailing in late 2008.
The combined increase in gasoline demand and decline in imports was sufficient to trump a 154,000 b/d jump in production to 8.951 million b/d. While gasoline output was higher, distillate production fell 119,000 b/d to 3.933 million b/d, as refiners looked to cash in on the disparate pricing of the New York Mercantile Exchange (NYMEX) heating oil and RBOB crack spreads. The July RBOB crack spread was running at about a $5-per-barrel premium to the July heating oil crack spread. A futures crack spread is the difference between the futures price of the raw barrel of crude oil and the futures price of the refined product it can produce.