Platts analysis of U.S. EIA oil stocks data
New York, NY - June 17, 2009
U.S. gasoline stocks increased by a much larger-than-expected 3.385 million barrels to a total 205.034 million barrels last week as refiners ratcheted up production and imports recovered, an analysis of weekly data from the U.S. Energy Information Administration (EIA) showed Wednesday.
U.S. gasoline stocks are 4.294 million barrels less than the five-year average and 3.876 million barrels fewer than year-ago levels. Analysts polled by Platts expected gasoline stocks to rise 650,000 barrels.
The stock build was spread across every region except the Gulf Coast, where gasoline inventories fell 400,000 barrels to 68.3 million barrels. Given that gross inputs to refineries were higher along the Gulf Coast, the draw in that region suggests that either there were problems with upgrading units or that the product is in Colonial Pipeline and on its way up the Atlantic Coast.
With prices in New York Harbor running at a premium to the Gulf Coast, the likelier explanation is the gasoline is in Colonial Pipeline.
The increase in inventories occurred despite a pick-up in implied demand. Implied demand is the amount of product that moves through the U.S. distribution system, not actual end consumption. And implied demand climbed despite an increase in retail prices at the gas pumps.
Implied demand rose 213,000 barrels per day (b/d) to 9.354 million b/d on a week-over-week basis. On a four-week moving average, implied gasoline demand at 9.263 million b/d was 104,000 b/d greater than year-ago levels, or up 1.1%. The jump in implied demand occurred despite the seventh consecutive rise in retail prices. Prices at the pump for conventional gasoline rose 3.9 cents from the prior reporting week to $2.6390 per gallon. Retail prices during the past seven weeks have jumped 62.3 cents per gallon, suggesting that consumers may be feeling more confident about the U.S. economy.
Refiners, responding to attractive profit margins, pushed gasoline yields to 60.15%. The New York Mercantile Exchange (NYMEX) July RBOB crack spread was running at about a $7.50-per-barrel premium to the heating oil crack spread for the week ending June 12. A crack spread is the difference between the price of the barrel of raw crude oil compared to the price of the refined products it can produce. Gasoline production increased 180,000 b/d to 9.131 million b/d, while imports recovered from a very low level for this time of year, climbing 218,000 b/d to 1.09 million b/d.
Conversely, refiners throttled back production of distillates. However, the stock-building trend remained intact due to very low demand for diesel. Middle distillate stocks edged up 308,000 barrels to 150.026 million barrels at the same time demand dropped 188,000 b/d to 3.384 million b/d week-over-week. On a four-week moving average, implied demand for middle distillates was down 8.9% at 3.512 million b/d, or down 342,000 b/d year-over-year. While the U.S. consumer may be feeling more optimistic about the economy's prospects, industry has yet to demonstrate the same optimism.
Still, product inventory increases nearly offset the 3.874-million-barrel decline in U.S. commercial crude oil inventories. At 357.721 million barrels, U.S. commercial crude stocks were 31.721 million barrels greater than the five-year average and 56.766 million barrels more than year-ago levels.
Total U.S. oil inventories declined a slight 1.5 million barrels to 1.099 billion barrels.