Analysis of US EIA data: Crude oil stocks drop sharply in U.S. Gulf Coast, Midwest


New York - August 8, 2012


U.S. crude oil stocks dropped 3.729 million barrels for the week ended August 3 as imports fell in the key U.S. Gulf Coast and Midwest regions, the U.S. Energy Information Administration (EIA) said Wednesday.


At 373.586 million barrels, U.S. crude oil inventories are 9.73% greater than the five-year average of EIA data and are believed to be amply supplied ahead of a period when inventories typically decline over the coming weeks.


The draw is less than the 5.354-million-barrel drop reported by the American Petroleum Institute (API) late Tuesday. However, both the API and EIA inventories figures outpaced the 300,000 draw estimated by analysts in a survey conducted by Platts Monday.


The drop was led by a steep decline in U.S. Midwest stocks, which fell 2.899 million barrels to 104.424 million barrels. Stocks at the Cushing, Oklahoma delivery hub for New York Mercantile Exchange (NYMEX) crude oil futures contracts fell 802,000 barrels to 44.298 million barrels.


Canadian imports to the U.S., much of which heads to the Midwest, were down 158,000 barrels per day (b/d) to 2.113 million b/d. This is the lowest level since the week ended April 27.


A leak in the 317,600-barrel-per-day Enbridge Line 14 pipeline, which was shut from July 27 until August 7, was likely responsible for the sharp downturn in Canadian imports to the region.


Total Midwest imports fell 65,000 b/d to 1.603 million b/d.


Gulf Coast stocks declined 531,000 barrels to 184.166 million barrels, while imports fell 75,000 b/d to 3.918 million b/d. This was the lowest import figure for the region since December 2011.


Imports from Iraq fell sharply, down 252,000 b/d to 183,000 b/d. Imports from Mexico were down 135,000 b/d to 914,000 b/d and imports from Saudi Arabia declined 125,000 b/d to 1.262 million b/d.


Meanwhile, imports to the U.S. in aggregate increased 221,000 b/d to 8.627 million b/d, as West Coast imports shot up 270,000 b/d to 1.820 million b/d. The Atlantic Coast and Rocky Mountain regions saw modest increases as well.


U.S. refinery runs increased 0.4 percentage points to 92.6% of capacity, in line with the expectations of analysts. The biggest increase was seen in the Gulf Coast, where inputs of crude oil to refineries increased 171,000 b/d to 7.910 million b/d, pushing regional run rates up 2.6 percentage points to 93% of capacity.


U.S. GASOLINE STOCKS DROP


U.S. gasoline inventories declined 1.801 million barrels to 206.069 million barrels, roughly in line with analyst expectations. The draw was led by a 1.135-million-barrel decline in U.S. Atlantic Coast (USAC) stocks. USAC gasoline stocks of 51.676 million barrels were 9.79% less than the five-year average and 2.619 million barrels below the five-year low for the week reported.


U.S. West Coast gasoline stocks are also tight. At 26.71 million barrels last week, stocks were up 110,000 barrels, but 8.34% below the five-year average.


U.S. gasoline demand stated as a four-week moving average fell 3.36% year-on-year to 8.737 million b/d, once 2011 figures are adjusted to reflect higher exports.


Total U.S. demand for petroleum products declined 204,000 b/d to 18.946 million b/d. However this was largely due to a decline in supplied residual fuel oil of 429,000 b/d.


U.S. distillate stocks fell 724,000 barrels to 123.541 million barrels, led by a 1.398 million-barrel decline in Gulf Coast distillate stocks. The region's total fell to 38.803 million barrels. Analysts polled by Platts expected a one million-barrel increase.


U.S. distillate demand as a four-week moving average was 3.596 million b/d, down 2.84% year-on-year.


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


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