(CVX) U.S. Crude Oil Supplies Surge Further

The U.S. Energy Department’s weekly inventory release showed that crude stockpiles increased, as imports climbed. The report further revealed that within the ‘refined products’ category, gasoline stocks rose, while distillate supplies were down from the week-ago levels. Meanwhile, refiners scaled up their utilization rates by 0.7%.

The Energy Information Administration (EIA) Petroleum Status Report, containing data of 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 rose by 2.86 million barrels for the week ending October 5, 2012, following a climb of 1.67 million barrels in the previous week.

The analysts surveyed by Platts – the energy information arm of McGraw-Hill Companies Inc. (MHP), had expected oil stocks to go up some 1.5 million barrels. An uptick in the level of imports led to the stockpile build-up with the world’s biggest oil consumer even as refiners improved their utilization rates.

However, crude inventories at the Cushing terminal in Oklahoma – the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange – edged down by 140,000 barrels from the previous week’s level to 44.03 million barrels. Stocks are currently just under the all-time high of 47.78 million barrels reached in June.

At 369.23 million barrels, current crude supplies are 10.9% above the year-earlier level, and exceeds the upper limit of the average for this time of the year. The crude supply cover was up from 24.8 days in the previous week to 25.0 days. In the year-ago period, the supply cover was 22.5 days.

Gasoline: Supplies of gasoline were up for just the second time in 12 weeks despite improvement in domestic consumption. The increase in gasoline inventories could be attributed to rising imports and production.

The 1.72 million barrels gain – contrary to analyst projections for a decline in supply level – took gasoline stockpiles up to 197.13 million barrels. However, notwithstanding this build, the existing inventory level of the most widely used petroleum product is still 4.5% off the year-earlier levels and is in the lower limit of the average range.

Distillate: Distillate fuel supplies (including diesel and heating oil) dropped by 2.22 million barrels last week, much higher than analyst expectations for a 1.5 million barrels decrease in inventory level. The fall in distillate fuel stocks – the fifth in as many weeks – could be attributed to stronger demand and lower imports, partially offset by higher production.

At 118.66 million barrels, distillate supplies are 20.7% 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 to 87.4%. The analysts were expecting the refinery run rate to decline by 0.3%.

Read the full analyst report on “CVX”
Read the full analyst report on “VLO”
Read the full analyst report on “MHP”
Read the full analyst report on “TSO”
Read the full analyst report on “COP”
Read the full analyst report on “XOM”
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