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Platts Pre-Report Survey of EIA/API Data Suggests 2.4 Million-Barrel Build in U.S. Crude Oil Stocks

Wednesday, 16 April 2014 | 00:00
U.S. commercial crude oil stocks are expected to have increased 2.4 million barrels during the reporting week ended April 11, according to Platts analysis and a survey of oil analysts.The U.S. Energy Information Administration (EIA) is scheduled to release its weekly data at 10:30 a.m. EDT (1530 GMT) Wednesday.

The expected build in stocks comes after a large, 4 million-barrel rise in crude oil inventories the week ended April 4 following a bunker fuel spill that temporarily shut the Houston Ship Channel to incoming traffic.

Based on the EIA five-year average, U.S. crude oil stocks should have risen by about 800,000 barrels the week ended April 11.

Though overall stocks are expected to rise, some analysts noted that crude oil inventories at the New York Mercantile Exchange (NYMEX) delivery point in Cushing, Oklahoma, are expected to have fallen by about 1 million barrels the week ended April 11.

Cushing stocks rose 345,000 barrels to 27.6 million barrels the week ended April 4, EIA data showed, marking the first build in stocks at the hub in 11 weeks.

The build could have been due to some pipeline back-up following delays in the Houston Ship Channel, analysts said. But analysts contend that southbound flows are likely to be back to normal and stocks at Cushing should continue to decline as the waterway resumes normal activity.

Cushing stocks were at a 28.7% deficit to the EIA five-year average for the April 4 reporting week.

U.S. refinery utilization rates are expected to have fallen 0.2 percentage point the week ended April 11 to 87.3% of capacity, based on EIA data.

Phillips 66 was performing some unspecified, planned maintenance at its 260,000 barrels per day (b/d) Alliance refinery in Belle Chasse, Louisiana, a spokesman said the week ended April 11. Also, a boiler was shut Wednesday at Tesoro's 166,000 b/d Golden Eagle refinery in Martinez, California, according to a market source.

Tesoro spokeswoman Tina Barbee said "planned and unplanned maintenance activities" were under way at the facility and that Tesoro did not anticipate any impact to its supply commitments.

Analysts also noted that Philadelphia Energy Solutions has completed maintenance at its 350,000 b/d Philadelphia refinery.

U.S. gasoline stocks are expected to fall 1.7 million barrels as demand continues to expand into the summer driving season, analysts said.

"I think that production is going to be rising even more this week, but it's still not enough," said Oil Outlooks President Carl Larry. "Demand is the big story here."

Implied demand* for U.S. gasoline rose 283,000 b/d to 8.9 million b/d during the week ended April 4, EIA data showed, putting demand 6.12% above the five-year average. During the same week in 2013, gasoline demand was 8.47 million b/d.

U.S. distillate stocks are pegged to have declined 200,000 barrels the week ended April 11.

Larry said the direction of the distillate stock move could be an indicator of U.S. economic growth.

"The strong [U.S.] retail sales number and the dwindling jobless claims has us thinking more demand is just around the corner ... this could be reflected in the commercial fuel demand. We're talking planes and trucks," Larry said.

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