U.S. commercial crude oil stocks plunged 6.267 million barrels to 391.285 million barrels during the reporting week ended May 31, data from the U.S. Energy Information Administration (EIA) showed, as imported volumes dropped sharply and crude oil runs at U.S. refineries rose. The drop, which echoed the 7.792 million-barrel decline shown in American Petroleum Institute (API) figures released late Tuesday, was unexpected in its scope. Analysts polled by Platts Monday had expected a much more moderate 1 million-barrel drop, which was more in line with seasonal demand patterns.
U.S. crude oil production surpassed imports during the reporting week ended May 31 for the first time since January 1997.
Production averaged 7.3 million barrels per day (b/d) the week ended May 31, up 8,000 b/d on the week, while imports fell 549,000 b/d to 7.268 million b/d, EIA data showed. That put production at 32,000 b/d above imports, the first time since the week ended January 3, 1997, when production was 433,000 b/d above imports.
That was a brief anomaly, however, owing primarily to a large 1.7 million b/d drop in imports that week to 6.021 million b/d. Production at the time was waning, while the U.S.' reliance on foreign crude oil was growing. The last time the U.S. saw production regularly exceeding imports was in the early 1990s, before output fell below 7 million b/d.
U.S. production has risen swiftly over the past two years, from 5.575 million b/d the week ended January 7, 2011, led by Texas and North Dakota, and compensating for a decline in Alaskan production. The rise in domestic output has also reduced the need to import barrels. The week ended May 31, crude oil imports from Saudi Arabia fell 390,000 b/d to 1.214 million b/d, the EIA data showed, while imports from Iraq fell 225,000 b/d to 290,000 b/d.
Imports from Nigeria climbed 19,000 b/d during the week ended May 31, but, at 353,000 b/d, were down considerably from two years ago. Imports from Nigeria have fallen from more than 1 million b/d in December 2010, as U.S. refiners have opted for relatively less expensive U.S. light sweet crudes.
Meanwhile, the decline in crude oil imports during the week ended May 31 was led by the U.S. Gulf Coast (USGC), where volumes plunged 523,000 b/d to 3.676 million b/d. Imports also fell by 97,000 b/d in the Midwest. In contrast, imports rose by 105,000 b/d on the East Coast (USEC).
USGC stocks led the draw, dropping 2.522 million barrels to 190.723 million barrels. Inventories also declined sharply on the U.S. West Coast (USWC), dropping 1.564 million barrels to 54.801 million barrels, their lowest level in five weeks. Crude oil in transit from Alaska also dropped sharply, falling by 2.734 million barrels to 1.965 million barrels. This is the first time crude oil in transit has dropped below the 2 million-barrel mark since mid-October 2012.
Stocks fell by 484,000 barrels at Cushing, Oklahoma – delivery point for the New York Mercantile Exchange (NYMEX) crude oil contract – to 50.024 million barrels in the first drop since the week ended May 3. The decline accounted for slightly less than half of the 1.013 million-barrel decline across the Midwest region more generally.
Refinery utilization rates jumped 2 percentage points during the week ended May 31 to 88.4% of capacity, as gross inputs to U.S. refineries – which include feedstocks like low sulfur straight run and vacuum gasoil – rose 343,000 b/d to 15.738 million b/d. Of that, crude oil inputs jumped by 433,000 b/d to 15.462 million b/d.
Utilization climbed 5.4 percentage points on the USWC to 86.3%, helped by a 158,000 b/d increase in crude oil runs. Rates also rose sharply in the Midwest, climbing 4.6 percentage points during the week ended May 31 to 83.4% with crude oil runs climbing 183,000 b/d.
The USGC saw a marginal 0.3 percentage-point increase in refinery utilization, featuring a 90,000 b/d increase in crude oil inputs.
U.S. gasoline inventories ticked downward by 366,000 barrels during the week ended May 31 to 218.797 million barrels, but dropped a particularly sharp 1.826 million barrels along the USEC – home of the New York Harbor-delivered NYMEX RBOB contract – to 60.914 million barrels, the lowest level since April 19.
By contrast, inventories increased in three of the four other reporting districts, jumping by 1.004 million barrels along the USGC, by 349,000 barrels in the Midwest and by a marginal 176,000 barrels along the USWC.
The drop in USEC gasoline stocks came amid a slide in imports, which fell 102,000 b/d to 504,000 b/d. Gasoline imports fell 198,000 b/d nationally.
Implied demand* fell 134,000 b/d to 8.822 million b/d, while production increased 332,000 b/d to 9.341 million b/d amid the rise in refinery utilization.
Analysts polled by Platts anticipated a 1 million-barrel build in gasoline inventories.
U.S. distillate stocks climbed for the second straight reporting week, jumping 2.611 million barrels to 123.274 million barrels, their highest level since late February. The build was in line with, but greater, than what analysts had forecasted.
Implied demand* slid 65,000 b/d to 3.751 million b/d, while domestic production ticked a marginal 37,000 b/d higher to 4.8 million b/d.
Distillate stock levels rose in four of the five reporting districts, jumping 1.134 million barrels on the USEC, by 1.585 million barrels in the Midwest, by 286,000 barrels in the Rocky Mountains and by 590,000 barrels along the USWC.
Distillate Inventories fell by 984,000 barrels in the USGC.
Source: Platts