U.S. commercial crude oil stocks increased 4.9 million barrels during the week ended February 6, U.S. Energy Information Administration (EIA) data released this week showed.Analysts surveyed by Platts expected crude oil stocks to rise 3.4 million barrels.At 417.9 million barrels, crude oil stocks set another all-time high. The last reporting period in which the crude oil inventory fell was the week ended January 2.

Total U.S. crude oil production rose 49,000 barrels per day (b/d) to 9.23 million b/d, helping push stocks higher. Daily output one year ago equaled 8.13 million barrels.

Stocks have continued rising even though refineries are operating at high levels for this time of year. Refinery activity tends to slow in February as facilities perform seasonal repairs.

Crude oil runs increased 20,000 b/d to 15.6 million b/d the week ended February 6. The refinery utilization rate inched 0.1 percentage point higher, compared with analysts' expectation that the rate would fall 0.5 percentage point.

Refineries operated at 90% of capacity the week ended February 6, boosting the three-week average to 89.3%. Over the same period a year ago, the refinery utilization rate was 87.1%.

Some refineries may have delayed planned maintenance because the economics for turning crude oil into refined products has been favorable.

For example, USGC cracking margins for benchmark Louisiana Light Sweet (LLS) crude oil averaged $12.28 per barrel (/b) the week ended February 6. The U.S. Midwest (USMW) cracking margin for Canadian Syncrude was $14.47/b the week ended February 6.

By comparison, both of these cracking margins were in the single digits at the beginning of 2015 before crossing the $10/b mark in late January, where they have been since.

Platts margin data reflects the difference between a crude oil's netback and its spot price.

Netbacks are based on crude oil yields, which are calculated by applying Platts product price assessments to yield formulas designed by Turner, Mason & Co.

The USGC refinery utilization rate rose 1.4 percentage points to 90.6% of operable capacity.

But USGC crude oil stocks still increased 2.2 million barrels, the largest build in the country by region.

Stocks at Cushing, Oklahoma -- delivery point for the New York Mercantile Exchange (NYMEX) crude oil futures contract -- reached 42.6 million barrels, up 1.2 million barrels.

Cushing inventory has been increasing steadily since early October, when stocks were only 18.9 million barrels. Traders have an incentive to store crude oil in Cushing because NYMEX crude oil futures are less expensive for prompt delivery than later-dated contracts.

U.S. crude oil imports fell 101,000 b/d to 7.3 million b/d the week ended February 6, helping mitigate the build.

That being said, USMW imports have been climbing, up 13% the last three weeks to 2.46 million b/d. The region's record high was set in October at 2.53 million b/d.

Greater pipeline capacity from Illinois to Oklahoma and onward to the Gulf Coast (USGC) has coincided with higher USMW imports as well as greater imports from Canada.

Canadian imports rose 205,000 b/d the week ended February 6 to 3.3 million b/d. The four-week average was 3.1 million b/d, compared with 2.6 million b/d during the same period one year ago.

REFINED PRODUCTS SPLIT

U.S. gasoline stocks increased 2 million barrels to 242.6 million barrels the week ended February 6, EIA data showed.

Analysts had expected stocks to decline 250,000 barrels.

Since the week ended December 12, gasoline stocks have been above the EIA five-year average for the same reporting period, with the surplus at 3.7% the week ended February 6.

On the Atlantic Coast (USAC) -- home to New York Harbor-delivered NYMEX RBOB futures -- gasoline stocks increased 874,000 barrels to 69.4 million barrels. The region's surplus to the five-year average was 11.9%.

Stocks appeared tighter elsewhere. USMW stocks declined 356,000 barrels to 53.2 million barrels, a 3.3% deficit to the five-year average. USGC stocks increased 1.2 million barrels to 79.5 million barrels, a 2.9% surplus to the five-year average.

Total U.S. distillate stocks fell 3.3 million barrels the week ended February 6 to 131.2 million barrels, compared with analysts' expectation of a 1.3 million-barrel drawdown.

On the USAC, combined stocks of low- and ultra-low-sulfur diesel decreased 1.9 million barrels to 30.36 million barrels, but still stood 22.7% above the five-year average.

Regional supply resembles that of gasoline because USAC stocks appear plentiful compared with the USMW and USGC.

USMW combined stocks were down 427,000 barrels to 31.3 million barrels, a 2.6% surplus to the five-year average. USGC combined stocks fell 35,000 barrels to 37.6 million barrels, a 4.1% deficit to the 2010-14 average.
Source: http://www.platts.com/pressreleases/2015/021115b/no