Platts analysis of U.S. EIA data
New York, NY - July 1, 2009
Little improvement in U.S. demand pushed product inventory levels higher for the 14th consecutive week, an analysis of the weekly data released Wednesday by the U.S. Energy Information Administration (EIA) showed.
Total implied demand, the amount of product that moves through the distillation system, edged up 256,000 barrels per day (b/d) to 18.169 million b/d week-over-week with all of the increase concentrated in residual fuel oil and "other oils" reflecting a stream of mediocre macroeconomic data, EIA said. On a four-week moving average, total implied demand at 18.443 million b/d was 1.129 million b/d below year-ago levels, or down 5.8%.
Contrary to historical trends, gasoline demand, which normally picks up ahead of the July 4 weekend, fell 76,000 b/d to 9.053 million b/d week-over-week. Languid demand for gasoline may aptly reflect the $1/gal rally in retail prices over the first half 2009. With no noticeable pick-up in demand, total product stocks increased 8.2 million barrels to 758.9 million barrels. At 758.9 million barrels, total U.S. product stocks were 77.81 million barrels above the five-year average and 81.6 million barrels above year-ago levels.
Conversely, crude stocks declined for the fourth consecutive week, bringing the cumulative decline to 15.784 million barrels. But during the second quarter, U.S. crude stocks fell just 9.234 million barrels as refiners kept run rates low due to poor demand. For the week ending June 26, U.S. commercial crude stocks dropped 3.66 million barrels to 350.193 million barrels with the majority of the decline concentrated along the Gulf and West coasts. Stocks along the Gulf Coast fell 1.559 million barrels to 183.105 million barrels, while inventories on the West Coast dropped 1.5 million barrels to 54.848 million barrels, reflecting relatively low levels of imports rather than any change in refinery utilization.
U.S. crude imports inched up 79,000 b/d to 9.363 million b/d, with a 195,000 b/d increase on the Gulf Coast offset by a 348,000 b/d decline in the Midwest.
Despite the down trend in crude inventories, stocks at Cushing, Oklahoma -- home of the New York Mercantile Exchange (NYMEX) delivery point -- have been remarkably stagnant and keeping the front of the futures curve stable. Stocks at Cushing edged up 363,000 barrels to 28.601 million barrels and over the past three months have moved up and down within a 2 million barrel range.
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