Analysis of U.S. EIA data: U.S. crude stocks fall to near one-year low
New York - December 30, 2009
U.S crude stocks fell another 1.538 million barrels to 326.008 million barrels, the lowest in nearly one year, despite a rebound in imports, an analysis of the weekly oil data released Wednesday by the U.S. Energy Information Administration (EIA) showed.
Blunting the bullish impact of the stock draw was a 2.876 million-barrel decline on the isolated West Coast. East of the Rockies, crude stocks increased by 300,000 barrels, and built one million barrels in the Rocky Mountain region.
Commercial crude stocks at 326.008 million barrels were 17.727 million barrels above the five-year average and 7.271 million barrels above year-ago levels. This was the narrowest surplus against the five-year average in one year and the smallest surplus against year-ago levels in 13 months.
Crude imports rebounded by 320,000 barrels to 8.027 million barrels per day (b/d), but on a four-week moving average, crude imports at 7.911 million b/d were 1.589 million b/d below year-ago levels.
By the second week of January, crude imports could rebound as tankers being held out to sea due to end-of-year tax considerations offload their cargoes.
The four-week moving average in implied demand* climbed 1.5 percentage points from the previous EIA report was down just 0.2 percentage points year-over-year. At 19.090 million b/d, U.S. oil demand was down 39,000 b/d year-over-year on a four-week moving average. But the U.S. economy is coming out of recession at present while one year-ago it was on the precipice of near collapse.
Week-over-week, however, U.S. oil demand dipped 315,000 b/d to 19.062 million b/d with the bulk of the decline concentrated in middle distillates.
Demand for middle distillates fell 332,000 b/d to 3.656 million b/d week-over-week and was still negative on a four-week moving average. Despite the drop-off in demand for middle distillates, stocks drew 2.055 million barrels as production and imports sharply declined. Distillate production edged down 96,000 b/d to 3.71 million b/d, a very low level for December given the usually pick-up in demand for heating oil.
Heating oil stocks decreased by 1.9 million barrels to 44.4 million barrels as temperatures along the Atlantic Coast fell to more seasonal levels after an abnormally warm fall while inventories of ultra-low sulfur diesel fell 200,000 barrels to 95.3 million barrels.
Gasoline stocks also declined, falling 366,000 barrels to 215.964 million barrels.
While light end products declined, heavy-ends such as jet and residual fuel oil increased, indicative of refiners upping crude inputs more so than gross throughputs.
As a result, total U.S. product inventories declined 6.588 million barrels to 725.311 million barrels, a 7-month low. Product stocks were 36.933 million barrels above the five-year average and 34.611 million barrels above year-ago levels. But continued low refiner output could trump still-unimpressive levels of oil demand, causing product stocks to erode further.
*Implied demand is the amount of product that moves through the U.S. distribution system, not actual end consumption.
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