(CVX) U.S. Oil and Gasoline Supplies Shrink

The U.S. Energy Department’s weekly inventory release showed that crude and gasoline stockpiles moved downwards, while distillate supplies rose. Meanwhile, refiners reduced processing rates by 0.4%.

The Energy Information Administration (EIA) Petroleum Status Report – which contains data for the previous week ending on Friday, outlines information regarding the weekly change in petroleum inventories held and produced by the U.S., both locally and abroad.

The report provides an overview of the level of reserves and their movements, thereby helping investors understand the demand/supply dynamics of petroleum products. It is an indicator of current oil prices and volatility that affect businesses of companies engaged in the oil and refining industry, such as ExxonMobil (XOM), Chevron Corp. (CVX), ConocoPhillips (COP), Valero (VLO) and Tesoro (TSO).

Crude Oil

The federal government’s EIA report revealed that crude inventories shrank by 3.12 million barrels for the week ending July 8, 2011, after falling by 889,000 barrels in the preceding week. Analysts who had been surveyed by Platts, the energy information arm of McGraw-Hill Companies Inc. (MHP), had expected a much smaller decline. A large drop in imports led to the dip in stockpile with the world’s biggest oil user.

In particular, crude inventories at the Cushing terminal in Oklahoma – the key delivery hub for U.S. crude futures – came off 615,000 barrels from last week’s level to 37.65 million barrels. It reached an all-time high of 41.90 million barrels earlier this year.

At 355.46 million barrels, current crude supplies are 0.7% higher than the year-earlier level and are above the upper limit of the average for this time of the year. The crude supply cover was down from 23.6 days in the previous week to 23.3 days. In the year-ago period, the supply cover was 23.2 days.

Gasoline

Supplies of gasoline decreased for the fourth successive week on the back of lower production, more than offsetting the higher import levels and weaker demand. The 840,000 barrels-drawdown against projections for a build-up took gasoline stockpiles down to 211.70 million barrels. The existing inventory level is 4.2% below the year-earlier levels and is in the lower half of the average range.

Distillate

Distillate fuel inventories (including diesel and heating oil) were up by 2.97 million barrels last week, much higher than projections. The increase in distillate fuel supplies can be attributed to tepid demand, partially offset by lower production and imports.

At 145.03 million barrels, distillate supplies are 10.8% less than the year-ago level but are in the upper boundary of the average range at this time of the year.

Refinery Rates

Refinery utilization was down 0.4% from the prior week to 88.0%.

CONOCOPHILLIPS (COP): Free Stock Analysis Report

CHEVRON CORP (CVX): Free Stock Analysis Report

MCGRAW-HILL COS (MHP): Free Stock Analysis Report

TESORO CORP (TSO): Free Stock Analysis Report

VALERO ENERGY (VLO): Free Stock Analysis Report

EXXON MOBIL CRP (XOM): Free Stock Analysis Report

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