U.S. crude oil stocks rose 1 million barrels during the reporting week ended February 14 -- just over half of what analysts were expecting -- as a drop in refinery run rates was partly offset by a decrease in U.S. imports, according to data released by the U.S. Energy Information Administration (EIA).At a total of 362.3 million barrels the week ended February 14, U.S. crude oil stocks were 3.58% above the EIA's five-year average. However, stocks were about 14.1 million barrels below year-ago levels.

Analysts polled Tuesday by Platts were anticipating a 1.9 million-barrel build in crude oil stocks and a 1 percentage-point drop in utilization rates.

EIA data show that refiners' utilization rates dropped 0.3 percentage point to 86.8% of capacity the week ended February 14.

Several U.S. refineries experienced unplanned outages the week ended February 14, including a gasoline unit at Tesoro's 166,000 barrels per day (b/d) Golden Eagle refinery in Martinez, California.

Chevron shut several units at its 243,000 b/d refinery in Richmond, California, while Phillips 66 idled a fluid catalytic cracker at its Ponca City, Oklahoma, refinery. Philadelphia Energy Solutions shut a crude oil unit at its 330,000 b/d Philadelphia refinery February 7 for planned maintenance.

The outages were partially offset by the return of producing units at Shell's 145,000 b/d Puget Sound refinery in Washington and Delek's 70,000 b/d El Dorado, Arkansas, refinery.

Data from Macquarie earlier this week showed nearly 3 million b/d of operable U.S. Gulf Coast (USGC) refinery capacity-- nearly a third of the region’s total operable capacity -- is, or will be, offline across the first quarter of 2014.

EIA data for the week ended February 14 showed that USGC refiners were operating at 87.4% of capacity, compared with 88% in the week ended February 7.

In that region, crude oil stocks rose 2.5 million barrels the week ended February 14 to 176.1 million barrels, while imports to the USGC dropped 330,000 b/d to 3.58 million b/d.

Crude oil stocks at the New York Mercantile Exchange (NYMEX) delivery hub at Cushing, Oklahoma, fell 1.7 million barrels to 35.9 million barrels the week ended February 14, marking the third consecutive week of declines at the hub and putting stocks there at a 3.44% deficit to the five-year average.

In the U.S. Midwest, crude oil stocks fell 2.6 million barrels to 102.8 million barrels the week ended February 14.

Torbjorn Kjus, an oil market analyst at DNB Bank, called the EIA report "fairly neutral," but noted that one bullish element was the Cushing draw.

"But as refinery maintenance starts to kick in, the PADD 2 throughput should drop 300,000 b/d (more than 2 million barrels per week), preventing further stock draws in Cushing," Kjus said in a note.

Crude oil imports to the U.S. the week ended February 14 fell 508,000 b/d to 7.421 million b/d, led by a 398,000 b/d decline in imports from Venezuela to 636,000 b/d.

There was a 522,000 b/d increase in imports from Saudi Arabia the week ended February 14, but import declines of 390,000 b/d and 394,000 b/d from Iraq and Kuwait, respectively, offset those gains.

U.S. DISTILLATE IMPORTS SURGE

Distillate imports rose 60,000 b/d to 329,000 b/d the week ended February 14, 13% above the EIA five-year average of 291,000 b/d.

Total distillate stocks declined 300,000 barrels to 112.7 million barrels, keeping stocks at a more than 22% deficit to the five-year average.

Analysts were anticipating a 2 million-barrel decline in distillate inventories.

Distillate stocks have fallen by more than 12.2 million barrels during the last six weeks as cold weather across the U.S. continues to weigh on stockpiles.

U.S. Atlantic Coast combined low and ultra-low sulfur diesel (ULSD) stocks of 18.34 million barrels the week ended February 14 are nearly 31% below the five-year average.

Stocks were 21.6 million barrels around this time a year ago.

"The U.S. crude oil market is currently supported by the cold weather which negatively affects oil production growth, particularly in North Dakota, and at the same time positively affects demand for distillates," Kjus said.

"We should, however, within the coming four to six weeks see a shift in focus towards the gasoline market and the temperature effect will wane out," he added.

U.S. gasoline stocks rose 300,000 barrels to 233.4 million barrels the week ended February 14, counter to expectations of a 1.3 million-barrel draw.

Implied demand* for finished gasoline fell 295,000 b/d to 8.03 million b/d.

Kjus noted that gasoline stocks normally start to draw down from this point in the season until the middle of May.

"We did not get the normal gasoline stock draw this week, and any anomaly versus this normal pattern of gasoline stock draws poses a [bearish] threat to U.S. oil prices in the coming two to three months," Kjus said.

"We think there is large risk for a short-term downward correction in WTI prices, noting that speculative positions in WTI [are at a] record high right now, and we will soon approach peak refinery maintenance season in the middle of March," Kjus said.

NYMEX March crude oil was fairly flat after the release of EIA data, with the contract down 9 cents at $103.22 per barrel (/b) at 11:08 a.m. EST (1608 GMT). By 12:20 p.m. EST (1720 GMT), the contract was about 21 cents lower on the day at $103.10/b.

NYMEX March ULSD was up 1.22 cents at $3.1590 per gallon (/gal), and March RBOB was down 89 points at $2.8158/gal.

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