By July 9, 2015 Read More →

American crude oil inventories rose 384,000 barrels last week

Daily crude oil production increased 9,000 b/d to 9.604M b/d

The U.S. commercial crude oil stocks increased 384,000 barrels to 465.763 million barrels in the week that ended July 3, Energy Information Administration (EIA) data showed Wednesday.

crude oilAnalysts surveyed Monday by Platts expected a 1.1 million-barrel decline.

Crude oil stocks have seen counter-seasonal builds the last two weeks, adding a total of 2.77 million barrels to inventories.

High crude oil imports and sustained domestic production have outweighed strong refinery activity, leading stocks higher.

Imports dipped 197,000 barrels per day (b/d) last week to 7.316 million b/d, but remained above year-ago levels for the second week in a row. Imports have averaged 7.2 million b/d year-to-date.

By country of origin, the declines mostly came from Colombia and Kuwait where imports fell a total of 411,000 b/d to 539,000 b/d.

Greater imports from Saudi Arabia, up 286,000 b/d to 1.004 million b/d, and Mexico, up 142,000 b/d to 632,000 b/d, helped offset the decline.

Canadian imports were steady, down 31,000 b/d to 2.765 million b/d.

Analysts have been awaiting evidence that more cargoes are arriving, reflecting those that were fixed last month when Brent-based crudes became more competitive in price.

Nigerian imports, for example, were seen for the first time last week since the week ended May 15, averaging 27,000 b/d.

The ICE Brent-West Texas Intermediate (WTI) price spread narrowed to less than $3 per barrel (/b) in mid-June, down from over $8/b in late June. However, the spread has since widened, fluctuating in the $4-$5 range so far in July.

Daily crude oil production was estimated to have increased 9,000 barrels to 9.604 million barrels. That was just below the record-high of 9.610 million b/d set the week ended June 5, according to EIA weekly data going back to 1983.

The increase was limited to Alaska where production rose 17,000 b/d to 434,000 b/d. The continental U.S. saw output fall 8,000 b/d to 9.17 million b/d.

Crude oil runs increased 65,000 b/d to 16.596 million b/d. However, gross inputs decreased 47,000 b/d to 16.929 million b/d, lowering the refinery utilization rate 0.3 percentage points to 94.7% of operable capacity.

Analysts surveyed Monday by Platts expected the utilization rate had increased 0.2 percentage points.

By region, the biggest increase in crude oil stocks occurred on the West Coast, where inventories were up 1.197 million b/d.

Most of that rise was accounted for by the West Coast subcategory, “Oil Stocks in Transit (on Ships) from Alaska.”

Moreover, with West Coast crude oil stocks being relatively isolated from the rest of the country’s pipeline network, analysts tend to downplay the significance of changes.

The U.S. Gulf Coast (USGC) crude oil stocks fell by 368,000 barrels to 233.938 million barrels and decreased in the Midwest by 510,000 barrels to 137.844 million barrels.

Stocks at Cushing, Oklahoma — delivery point for the New York Mercantile Exchange (NYMEX) crude oil futures contract — increased 299,000 barrels to 56.667 million b/d.

The Cushing inventory has now risen the last two weeks, after falling eight of the nine weeks prior to that.

Gasoline stocks increased 1.215 million b/d to 217.952 million barrels, compared with analysts’ expectations of a 400,000-barrel decline.

The increase was driven by the Gulf Coast, where stocks were up 2.107 million barrels to 74.489 million barrels. Inventories there sit 2.9% above the five-year average.

On the Atlantic Coast — home to the New York Harbor-delivered NYMEX RBOB futures contract — gasoline stocks were up 618,000 barrels to 60.474 million barrels, a 2.8% surplus to the five-year average.

Atlantic Coast gasoline imports surged 109,000 b/d last week to 797,000 b/d, helping stocks build.

The uptick in imports has coincided with the size of the region’s surplus declining the last few weeks after spending most of 2015 above 10% each week.Prompt RBOB futures have also been strong recently. The front-month Intercontinental Exchange (ICE) RBOB crack to Brent rose steadily last week, closing Friday at $24.26/b, up from $21.60/b a week earlier and well-above the $15-$16/b range seen a year ago.

Implied* gasoline demand decreased 199,000 b/d to 9.532 million b/d. The four-week moving average dipped slightly to 9.524 million b/d, but exceeded the five-year average for the same period by 388,000 b/d.

Distillate stocks increased 1.641 million barrels to 137.461 million barrels, more than analysts’ expectation of a 400,000-barrel increase.

Stocks of low and ultra-low sulfur diesel (ULSD) on the Atlantic Coast built 1.51 million barrels to 39.742 million barrels, a 44.3% surplus to the five-year average.

ULSD stocks on the Gulf Coast appear less well-supplied, with stocks sitting 2% above the five-year average. Stocks there fell 369,000 barrels last week to 37.541 million barrels.

* Implied demand is the amount of product that moves through the U.S. distribution system, not actual end consumption.

By Platts Oil Futures Editor Geoffrey Craig. 

Posted in: News

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