U.S. commercial crude oil stocks rose an unexpected 2.64 million barrels to 358.26 million barrels the week ended September 20 on lower refinery runs and higher imports, U.S. Energy Information Administration (EIA) data showed. A Platts analysis and survey of oil analysts Monday showed crude oil stocks had been expected to fall 1.5 million barrels for the reporting week ended September 20.

The build was predominantly in the U.S. Gulf Coast (USGC), where stocks rose 2.6 million barrels to 179.91 million barrels.

Crude oil runs at USGC refineries plummeted 400,000 barrels per day (b/d) to 8.07 million b/d during the week ended September 20, EIA data showed. Platts data shows Phillips 66's 239,000 b/d Lake Charles refinery in Westlake, Louisiana, had begun planned maintenance on a crude oil distillation unit as of September 18.

ExxonMobil's 502,500 b/d refinery in Baton Rouge, Louisiana, started planned maintenance September 15 to upgrade a furnace at one of the facility's crude oil units and to replace two diesel hydrotreaters.

Unplanned work on at Delek's 60,000 b/d Tyler, Texas, refinery took a fluid catalytic cracker out of service for a period of time during the week ended September 20, with flaring associated with the work lasting around seven hours during the night of September 19.

A 502,000 b/d jump in USGC crude oil imports – which rose to 3.97 million b/d – also supported a build in crude oil stocks. Total U.S. imports rose 347,000 b/d to 7.93 million b/d, outpacing domestic production, which fell 50,000 b/d to 7.78 million b/d during the week ended September 20.

The increase was led by a 334,000 b/d increase in Venezuelan imports, which rose to 817,000 b/d during the week ended September 20. Imports from Kuwait rose 266,000 b/d to 344,000 b/d. Saudi imports held largely steady at 1.39 million b/d.

Stocks at Cushing, Oklahoma – delivery point for the New York Mercantile (NYMEX) crude oil futures contract – fell 412,000 barrels to 32.85 million barrels the week ended September 20. Cushing stocks have fallen steadily from late May, when inventories were above 50 million barrels.

On the U.S. Atlantic Coast (USAC), crude oil stocks rose 651,000 barrels to 11.49 million barrels as refinery runs fell 89,000 b/d to 1.03 million b/d. Philadelphia Energy Solutions shut an alkylation unit at its 330,000 b/d refinery in Philadelphia on September 17.

Despite the drop in refinery runs, gasoline stocks remain well supplied. Total U.S. gasoline stocks rose 217,000 barrels to 216.24 million barrels the week ended September 20, counter to analysts' expectations of a 1.5 million-barrel draw. This leaves gasoline stocks almost 5.5% above the EIA five-year average.

USGC gasoline stocks climbed 1.65 million barrels the week ended September 20 to 79.39 million barrels. That put stocks at 15.4% above the five-year average.

However, that five-year average is skewed by low inventories in September 2008, when Hurricanes Gustav and Ike closed many USGC refineries. USGC inputs fell to 3.47 million b/d the week ending September 19, 2008, while USGC gasoline stocks stood at 54.66 million barrels.

High gasoline supplies and low demand have been reflected in physical USGC crack spreads. The USGC conventional gasoline crack against Light Louisiana Sweet crude oil closed at just 19 cents per barrel (/b) Tuesday, compared with $7.02/b last year.

And USAC gasoline stocks, which fell a bullish 1.67 million barrels to 54.41 million barrels the week ended September 20, remain 3.7% above the five-year average.

U.S. distillate stocks fell 234,000 barrels to 130.86 million barrels the week ended September 20, well below analysts' expectations of a 1 million-barrel draw. However, U.S. ultra low sulfur diesel (ULSD) stocks fell 1.36 million barrels to 108.22 million barrels, led by an 840,000-barrel draw in the USAC.

That said, combined low and ULSD stocks on the USGC rose 530,000 barrels to 36.35 million barrels the week ended September 20. ULSD production fell 184,000 b/d to 4.53 million b/d during the week ended September 20.

EIA data shows U.S. distillate exports rose 130,000 b/d to 1.39 million b/d during the week ended September 20; however, the weekly export data is often revised. The jump does reflect a steadily increasing trend in U.S. distillate exports, which have increased from around 800,000 b/d in late May.

Using Platts West of Suez clean tanker rates between the USGC and Europe as a proxy, distillate exports likely weakened in August before rebounding strongly in September.

Platts assessed a USGC- U.K. Continent clean products route, basis 38,000 metric tons, at Worldscale* (w)105 Tuesday. This is up from a recent low of w77.5 on August 15, but close to the w107.5 seen in late June when U.S. distillate exports were at a record high 1.29 million b/d, according to the more accurate EIA monthly data, which only goes back to June.

* Worldscale freight rates are used to price the cost of shipping crude or refined products from one port to another by tanker.
Source: Platts