(EIA) Crude Oil and Distillate Inventories Tumble

The U.S. Energy Department’s weekly inventory release showed that crude stockpiles fell from their 22-year high levels, as imports declined and refinery activity rose. The agency’s report further revealed that within the ‘refined products’ category, gasoline stocks soared, while distillate supplies plummeted.

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 fell by 133,000 barrels for the week ending June 22, 2012, after climbing by 2.86 million barrels the week before.

Analysts surveyed by Platts, the energy information arm of McGraw-Hill Companies Inc. (MHP), had expected oil stocks to go down some 1 million barrels. A decline in the level of imports and sharply higher refinery activity led to the stockpile drawdown 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 traded on the New York Mercantile Exchange – decreased by 339,000 barrels from previous week’s level to 47.42 million barrels. Stocks are just under the all-time high of 47.78 million barrels reached earlier in June.

At 387.17 million barrels, current crude supplies are 7.7% above the year-earlier level, and are over the upper limit of the average for this time of the year. The crude supply cover was down from 25.0 days in the previous week to 24.8 days. In the year-ago period, the supply cover was 23.8 days.

Gasoline: Supplies of gasoline increased for the third time in 4 weeks despite domestic consumption edging up 1.8% to 8.85 million barrels a day. The rise in gasoline inventories could be attributed to higher production.

The 2.08 million barrels gain – compared to analyst projections for a 300,000 barrels hike in supply level – took gasoline stockpiles up to 204.82 million barrels. Notwithstanding this increase, existing inventory level of the most widely used petroleum product is still 3.9% below the year-earlier levels and is in the lower limit of the average range.

Distillate: Distillate fuel supplies (including diesel and heating oil) decreased by 2.28 million barrels last week, contrary to analyst expectations for a 1 million barrel build. The fall in distillate fuel stocks – the second decline in 3 weeks – could be attributed to stronger demand.

At 118.85 million barrels, distillate supplies are 16.4% below the year-ago level and are under the lower limit of the average range for this time of the year.

Refinery Rates: Refinery utilization was up 0.7% from the prior week at 92.6%.

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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