The EIA weekly data looks bullish for both crude and products, for a change. Crude and products on NYMEX are rallying, after trading lower ahead of expected stock builds.
The report showed a 100,000 barrel build in crude stocks; however, that includes a 2.2 million barrel build on the West Coast, which is isolated from the rest of the country. East of the Rockies, crude stocks fell 2.1 million barrels.
Refinery utilization dropped, in contrast to an expected increase. Refinery glitches continue to keep plants from full rates, which factors most heavily on gasoline production. The failure to increase gasoline production resulted in gasoline stocks remaining unchanged. Analysts had expected stocks to build more than 1 million barrels.
However, the production loss was on the West Coast, where gasoline stocks fell 1.2 million barrels. So the bullish impact on the gasoline market from the failure to build total US stocks could be muted.
Distillate stocks rose modestly. Low-sulfur distillate stocks built again, at the expense of heating oil. Shrinking heating oil inventories -- now nearly 11.5 million barrels below the five-year average -- could make for an interesting winter.
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