In Oil & Companies News 08/05/2015
U.S. commercial crude stocks decreased 3.882 million barrels to 487.03 million barrels in the week that ended Friday, Energy Information Administration data showed.
Analysts surveyed Monday expected a 1 million-barrel build. Crude stocks last declined the week ended January 2. Since then, crude stocks pushed into record-high territory, adding 108.5 million cumulative barrels.
But refineries have returned from seasonal maintenance and more crude barrels are needed to churn out gasoline ahead of the summer driving season.
Crude runs jumped 247,000 b/d last week 16.347 million b/d, helping crude stocks draw lower.
Gulf Coast crude runs rose 135,000 b/d last week to 8.663 million b/d. The region’s refinery margins for WTI crude averaged $10.60/b in the week ended May 1, unchanged from the previous week but 65 cents/b higher than the average in April.
Platts margin data reflects the difference between a crude’s netback and its spot price. Netbacks are based on crude yields, which are calculated by applying Platts product price assessments to yield formulas designed by Turner, Mason & Co.
Greater crude runs drove the refinery utilization rate 1.7 percentage points higher to 93% of operable capacity. A minor net reduction of 16,000 b/d in crude distillation capacity also helped push the refinery utilization rate higher.
Analysts had expected the refinery utilization rate to increase 0.6 percentage point.
Another factor behind the crude draw was imports, which plunged 905,000 b/d to 6.541 million b/d, the lowest weekly average in almost a year.
The steep weekly drop was not due to the calculation being derived from a high base considering imports the week ended April 24 averaged 7.4 million b/d versus a year-to-date average of 7.3 million b/d.
Analysts are reluctant to assign too much meaning to week-to-week swings which can be influenced by how a single tanker is accounted for, and prefer examining import data over longer periods of time.
The four-week moving average for imports fell 388,000 b/d to 7.225 million, EIA data showed.
By country, imports from top suppliers Canada, Saudi Arabia, Venezuela and Mexico decreased a total of 881,000 b/d.
Each region saw crude stocks decline last week, with the biggest change coming in the Midwest, where inventories fell 1.605 million barrels to 144.481 million barrels.
Within the Midwest, stocks at Cushing, Oklahoma decreased 12,000 barrels to 61.674 million barrels.
The decline was modest but still marked the second week in a row that Cushing tanks have drained, a notable turnaround after stocks there had built continuously since early December.
The delivery point for the NYMEX crude futures contract began filling last October as traders took advantage of later-dated futures contracts being more expensive than near-term delivery, making storage profitable.
However, later-dated futures’ premium to near-term delivery has been shrinking, eroding the ability to make money through storage.
The 12-month-out futures contract’s premium averaged $5.23/b last week, down from $6.11/b the week prior which was itself the smallest premium since late December.
ULSD STOCKS RISE ON ATLANTIC COAST
US stocks of low and ultra low sulfur diesel increased 1.782 million barrels to 29.828 million barrels.
The region’s ULSD stocks sit 18.9% above the EIA five-year average for same reporting period.
Distillate stocks increased 1.503 million barrels last week to 130.773 million barrels. Analysts had expected a 430,000 barrel-decline, in line with the EIA five-year average which shows a 542,000 barrel-decline for the same reporting week.
Gasoline stocks increased 401,000 barrels, versus analysts’ expectations of a 250,000-barrel decrease.
Blending component stocks rose 1.256 million barrels to 201.895 million barrels, while conventional gasoline inventories decreased 851,000 barrels to 25.920 million barrels.
Implied gasoline demand fell 135,000 b/d to 8.785 million b/d, which was 66,000 b/d more than the year-ago level but was less than the EIA five-year average, also by 66,000 b/d.
At 227.852 million barrels, gasoline stocks exceeded the EIA five-year average by 7% for the same reporting period.
