(XOM) Crude Oil Supplies Jump to 5-Month High

The U.S. Energy Department’s weekly inventory release showed that crude stockpiles rose sharply to their highest level since September 2011. The agency’s report further revealed that gasoline and distillate stocks declined from their previous week levels. Meanwhile, refinery utilization rate was down by 1.9%.

The Energy Information Administration (“EIA”) Petroleum Status Report – which contains data for the previous week ending 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 Corp. (XOM), Chevron Corp. (CVX), ConocoPhillips (COP), Valero Energy Corp. (VLO) and Tesoro Corp. (TSO).

Analysis of the Data

Crude Oil: The federal government’s EIA report revealed that crude inventories jumped by 4.16 million barrels for the week ending February 24, 2012, after rising by 1.63 million barrels last week.

Analysts surveyed by Platts, the energy information arm of McGraw-Hill Companies Inc. (MHP), had expected oil stocks to go up some 1 million barrels. Lower refinery utilization rates and surging imports led to the stockpile buildup with the world’s biggest oil consumer.

In particular, crude inventories at the Cushing terminal in Oklahoma – the key delivery hub for U.S. crude futures – grew by 1.65 million barrels from last week’s level to 33.81 million barrels. Stocks reached an all-time high of 41.90 million barrels in April last year.

At 344.87 million barrels, current crude supplies are 0.4% below the year-earlier level, but are in the upper limit of the average for this time of the year. The crude supply cover was up from 23.4 days in the previous week to 23.5 days. In the year-ago period, the supply cover was 24.9 days.

Gasoline: Supplies of gasoline decreased for the second consecutive week even as domestic consumption fell 3.1% to 8.36 million barrels a day. The reduction in gasoline inventories could be attributed to lower production and a drop in imports.

The 1.6 million barrels dip – much more than that of projections – took gasoline stockpiles down to 229.93 million barrels. The existing inventory level of the most widely used petroleum product is 2.1% below the year-earlier levels and is in the upper limit of the average range.

Distillate: Distillate fuel inventories (including diesel and heating oil) were down by 2.07 million barrels last week, well above analyst expectations for a 1.3 million barrels decrease. The fall in distillate fuel supplies – for the third consecutive week – could be attributed to lower production and a jump in demand.

At 141.44 million barrels, distillate supplies are 11.2% below the year-ago level and are in the middle of the average range for this time of the year.

Refinery Rates: Refinery utilization was down 1.9% from the prior week at 83.6%. Analysts were expecting the refinery run rate to remain unchanged.
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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