The Platts pre-report analyst survey of EIA/API estimates suggests a drop of 1.2 million barrels in US oil stocks

Platts Survey of Analysts

• Crude oil stocks down 1.2 million barrels
• Gasoline stocks up 1 million barrels
• Distillates stocks up 700,000 barrels
• Refinery utilization or run rate unchanged at 85.9%

New York, NY - June 22, 2009

Analysts expect weekly oil inventory data from the U.S. Energy Information Administration (EIA) and the American Petroleum Institute (API) to show U.S. commercial crude stocks dropped 1.2 million barrels the week ending June 19, a Platts survey of analysts showed Monday.

The API is scheduled to release its data at 4:30 pm EDT (2030 GMT) Tuesday. EIA's report is to be released at 10:30 am EDT (1430 GMT) Wednesday.

U.S. crude imports edged back over 9 million barrels per day (b/d) the week ending June 12, but are not expected to increase further given the still low level of refinery run rates. "With crack spreads slipping throughout the reporting period, refiners will have little incentive to increase product output," said Linda Rafield, senior oil analyst and editor of the weekly Platts Futures and Derivatives Review. The spread is the price difference between the barrel of raw crude and the refined products that can be produced from that barrel of crude. "But refiners will likely continue to favor gasoline over output of middle distillates given the approximate $9/barrel premium the August RBOB crack spread on New York Mercantile Exchange (NYMEX) was holding to heating oil," Rafield said.

Refinery utilization is expected by analysts to be unchanged at 85.9%, according to EIA's latest set of data. Analysts project a 1-million-barrel build in gasoline stocks. Retail gasoline prices for conventional gasoline has rallied $1.044 per gallon (/gal) to $2.6860/gal since the end 2008 through the week ending June 15, 2009, according to EIA.

"Gasoline production will likely remain more than 9 million b/d, but implied demand of 9.354 million b/d may be difficult to sustain in the face of higher retail prices," Rafield said. Implied demand is the amount of product that moves through the U.S. distribution system, not actual end consumption.

Analysts anticipate an increase in middle distillate stocks of 700,000 barrels, with low demand keeping the stock-building trend intact.