Crude Stocks Highest Since 1930s

The U.S. Energy Department's weekly inventory release showed that crude stockpiles recorded another massive build, the thirteenth in a row and the largest increase since March 2001. The report further revealed that within the ‘refined products’ category, gasoline stocks rose, while distillate supplies were down from the week-ago level.

Analysis of the Data

Crude Oil: The federal government’s EIA report revealed that crude inventories jumped by 10.95 million barrels for the week ending Apr 3, 2015, following a climb of 4.77 million barrels in the previous week.

The analysts surveyed by Platts – the energy information arm of McGraw-Hill (NYSE:MHFI) Financial Inc. – had expected crude stocks to go up some 3 million barrels. Sustained strength in domestic production – just shy of the all-time highest level – plus a sharp uptick in the level of imports, led to another huge stockpile build with the world's biggest oil consumer.

In particular, crude inventories at the Cushing terminal in Oklahoma – the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange – were up 1.23 million barrels from the previous week’s level to 60.18 million barrels, a record.

Following the thirteenth successive weekly inventory surge, at 482.39 million barrels, current crude supplies are up 25.6% from the year-ago period and is at the highest level during this time of the year in 80 years at least. The crude supply cover was up from 30.4 days in the previous week to 30.8 days. In the year-ago period, the supply cover was 25.3 days.

Gasoline: Supplies of gasoline were up for the first time in 5 weeks, as demand weakened. This was partly offset by lower domestic production and imports.

The 817,000 barrels gain – contrary to analysts’ projections for a 1.8 million barrels decrease in supply level – took gasoline stockpiles up to 229.95 million barrels. Following the latest increase, the existing inventory level of the most widely used petroleum product is 9.3% higher than the year-earlier level and is well over the upper limit of the average range.

Distillate: Distillate fuel supplies (including diesel and heating oil) were down 250,000 barrels last week, defying analysts’ expectations for a 314,000 barrels rise in inventory level. The decrease in distillate fuel stocks – the second time in 3 weeks – could be attributed to strengthening demand. At 126.92 million barrels, distillate supplies are 12.1% above the year-ago level but are in the lower half of the average range for this time of the year.

Refinery Rates: Refinery utilization was up 0.7% from the prior week to 90.1%.

About the Weekly Petroleum Status Report

The Energy Information Administration (EIA) Petroleum Status Report, containing data of the previous week ending Friday, outlines information regarding the weekly change in petroleum inventories held and produced by the U.S., both locally and abroad.

The report provides an overview of the level of reserves and their movements, thereby helping investors understand the demand/supply dynamics of petroleum products. It is an indicator of current oil prices and volatility that affect the businesses of the companies engaged in the oil and refining industry.

The data from EIA generally acts as a catalyst for crude prices and affect producers, such as Exxon Mobil Corp (NYSE:XOM), Chevron Corp. (NYSE:CVX) and ConocoPhillips (NYSE:COP), and refiners such as Valero Energy Corp (NYSE:VLO), Phillips 66 (NYSE:PSX) and HollyFrontier Corp. (NYSE:HFC).

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