By August 3, 2015 Read More →

American crude oil stocks decrease 4.2 million barrels

Crude oil production drops 145,000 b/d

PLATTS – The U.S. commercial crude oil stocks decreased 4.2 million barrels to 459.7 million barrels in the week that ended July 24, Energy Information Administration (EIA) data showed last week.

crude oilAnalysts surveyed Monday by Platts had expected a 700,000-barrel decline.

The weekly decline was driven by crude oil production, estimated to have averaged 9.413 million barrels per day (b/d) last week, a decline of 145,000 b/d. Continental U.S. output fell 151,000 b/d to 8.953 million b/d.

Another factor putting downward pressure on stocks was imports, which fell 396,000 b/d.

Imports had averaged close to the year-to-date high for the week ended July 17, setting the stage for a decline last week. At 7.545 million b/d, imports were 2.6% below the year-ago level for the same reporting period.

By country of origin, the biggest declines were from Saudi Arabia, Nigeria and Venezuela, collectively falling 791,000 b/d.

Imports from Canada offset the decline, rising 228,000 b/d to 2.893 million b/d, roughly 2% below the year-to-date average.

Most Canadian imports enter the U.S. through the Midwest, where refineries upped crude oil runs 41,000 b/d to 3.782 million b/d. The region’s refinery utilization rate increased 1.2% to 98.7% of operable capacity, its highest level since early December.

Midwest refining margins using Canadian Syncrude averaged $15.30 per barrel (/b) last week, compared with a moving 30-day average of $13.53/b. Midwest refining margins using West Texas Intermediate (WTI) averaged $15.28/b, compared with a moving 30-day average of $14.97/b.

Platts margin data reflects the difference between a crude’s netback and its spot price. Netbacks are based on crude oil yields, which are calculated by applying Platts product price assessments to yield formulas designed by Turner, Mason & Co.

An increase in Midwest refinery crude oil runs placed downward pressure on stocks at Cushing, Oklahoma, delivery point for the New York Mercantile Exchange (NYMEX) crude futures contract.

Cushing stocks decreased 212,000 barrels last week to 57.706 million barrels, the first decline in five weeks. The hub’s storage remains below its historic peak of 62.2 million barrels seen in April, but sits almost 40 million barrels above the year-ago- level.

U.S. Gulf Coast (USGC) crude oil runs dropped 132,000 b/d last week to 8.601 million b/d, lowering the refinery utilization rate 1.3 percentage points to 94.7% of operable capacity.

With refinery activity slowing, USGC stocks drew 3.164 million barrels last week to 231.149 million barrels, the biggest decline by region.

Total crude oil runs dropped 108,000 b/d to 16.762 million b/d, helping offset the weekly decline in crude oil stocks.

Crude oil runs were slightly above the year-ago level for the same reporting period. For the week ended July 17, crude oil runs reached 16.87 million b/d, a record, according to EIA data that goes back to 1982.

The refinery utilization rate fell 0.4 percentage points last week to 95.1%. Analysts surveyed expected the utilization rate decreased 0.2 percentage points.


Gasoline stocks decreased 365,000 barrels last week to 215.922 million barrels. Analysts surveyed expected a 600,000-barrel decline.

By region, the biggest decline occurred on the U.S. Atlantic Coast (USAC), where stocks fell 823,000 barrels to 59.98 million barrels, a 3.3% surplus to the five-year average for the same reporting period.

The lower Atlantic accounted for the bulk of the USAC’s decline, as inventories fell 970,000 barrels to 28.194 million barrels.

However, stocks in the central Atlantic — home to the New York Harbor-delivered NYMEX reformulated blend stock for oxygenate blending (RBOB) futures contract — rose 315,000 barrels to 27.904 million barrels.

USAC gasoline imports decreased 158,000 b/d to 555,000 b/d, almost 4% below the year-ago level. Imports had been above year-ago levels for the previous five weeks as strong U.S. gasoline cracks had attracted cargoes from abroad.

Midwest gasoline stocks rose, as strong refinery activity pushed inventories 534,000 barrels higher to 48.834 million barrels.

Implied* demand decreased 410,000 b/d to 9.339 million b/d, representing a 2.4% surplus to the five-year average for the same reporting period.

Distillate stocks built 2.6 million barrels last week to 144.1 million barrels, compared with analysts’ expectation of a 400,00-barrel increase.

By region, the biggest build in low and ultra-low sulfur diesel (ULSD) stocks occurred on the Atlantic Coast. Stocks there grew 2.324 million barrels to 44.703 million barrels, a 51% surplus to the five-year average for the same reporting period.

USGC low and ULSD stocks increased 409,000 barrels to 39.432 million barrels, a 4.3% surplus to the five-year average for the same reporting period.

Commentary by Geoffrey Craig, Platts Oil Futures Editor.

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