US crude inventories climbed more than double that expected by analysts, to 4.83 million barrels the week ending January 21. The increase was driven by imports and a decrease in refinery inputs, an analysis of the data released Wednesday by the Energy Information Administration (EIA) showed.
This analysis and commentary is provided by Linda Rafield, Platts senior oil analyst and editor of the weekly Platts Futures and Derivatives Review, a supplement to Platts Oilgram Price Report.
At 340.56 million barrels, US crude stocks were 19.66 million barrels above the five-year average and 13.888 million barrels above year-ago levels.
The bulk of the stock build up was concentrated in the Gulf Coast region, where inventories increased 5.898 million barrels to 166.374 million barrels. Imports there surged 599,000 barrels per day (bpd) to 5.985 million bpd while crude inputs to refineries dropped 113,000 bpd to 7.244 million bpd.
Crude inputs to US refineries were down 212,000 bpd to 14.127 million bpd, reflecting planned and other maintenance.
US crude imports climbed 386,000 bpd to 9.385 million bpd as tankers that sat offshore during the end of 2010 due to tax considerations continued to offload cargoes during this reporting week.
Crude stocks were up in every region except the West Coast where inventories fell 3.026 million barrels to 46.106 million, the lowest level since January 29, 2010. Crude stocks in transit from Alaska fell to 1.3 million barrels from 2.54 million barrels, reflecting a shutdown on the Trans Alaska Pipeline System earlier this month.
Crude stocks at Cushing, Oklahoma – home of the New York Mercantile Exchange (NYMEX) futures contract delivery point – jumped 862,000 barrels to 37.667 million barrels, just 278,000 barrels off the all-time high posted the week ending May 14, 2010.
While demand by refiners for crude barrels sagged, so too did product consumption. US oil demand fell 301,000 bpd to 18.888 million bpd week-over-week, with gasoline demand taking the biggest hit. On a four-week moving average, US oil demand at 19.053 million bpd was up 300,000 bpd from the same four weeks in 2010, but down 460,000 bpd from EIA’s previous report. In the past three weeks, US oil demand on a four-week moving average has declined 982,000 bpd.
Gasoline demand on a four-week moving average at 8.77 million bpd was just 94,000 bpd above year-ago levels. Week-over-week, gasoline demand declined 144,000 bpd to 8.632 million bpd, which is a reflection of severe winter storms across the US.
The drop in gasoline demand contributed to a 2.404 million-barrel build in inventories and stocks rose despite a drop in imports and production. At 230.074 million barrels, gasoline stocks were 6.706 million barrels above the five-year average and 647,000 barrels above year-ago levels.
While gasoline stocks increased, inventories of middle distillates declined 140,000 barrels. The drop in middle distillates was concentrated in heating oil, in line with seasonal tendencies. Stocks of heating oil fell 1.561 million barrels to 41.977 million barrels while inventories of ULSD rose 2.415 million barrels to 112.093 million barrels.
And total US product stocks edged down 2.44 million barrels to 728.803 million barrels, reflecting a drop in inventories of propane, propylene and “other oils.” But product stocks are 25.408 million barrels above the five-year average and 10.22 million barrels above year-ago levels.
