EIA: Crude, Fuel Stock Piles Up

The U.S. Energy Department’s weekly inventory release showed another build-up in crude stockpiles, though less-than-expected. The agency’s report further added that fuel inventories climbed and refinery run-rates increased slightly from the previous week.

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 to 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 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 rose by 1.90 million barrels for the week ending February 4, 2011, against expectation of a larger gain set by analysts who had been surveyed by Platts, the energy information arm of McGraw-Hill Companies Inc. (MHP).

The increase in oil stocks – the fourth in as many weeks – follows a 6-week trend of steady decline in supplies, which slid by more than 26.5 million barrels during the period, fueled by cold weather conditions and the year-end tax-related inventory adjustments. Rise in domestic crude production led to the stockpile build in the world’s biggest oil user, more than nullifying the effects of falling imports and improved refinery operations.

At 345.1 million barrels, crude supplies are 4.1% above the year-earlier level and are above the upper limit of the average for the time this year. The crude supply cover was up from 23.9 days in the previous week to 24.2 days. In the year-ago period, the supply cover was 24.3 days.

Gasoline

Despite a drop in import levels, supplies of gasoline rose for the sixth straight week, as demand edged down by 25 thousand barrels per day and production increased by 249 thousand barrels per day. The 4.66 million barrel jump – more than analyst projections – took gasoline stockpiles to 240.9 million barrels, the highest in 21 years. Current inventory levels are 4.6% higher than year-earlier levels and are above the upper half of the average range.

Distillate

Distillate fuel inventories (including diesel and heating oil) were up by 288 thousand barrels last week, against forecasts for a drawdown. The increase in distillate fuel supplies can be attributed to a drop in demand (by 209 thousand barrels per day) and higher production (by 80 thousand barrels per day).

At 164.4 million barrels, distillate supplies were 5.3% more than the year-ago level and also above the upper boundary of the average range for this time of the year.

Refinery Rates

Refinery utilization was up 0.2% from the prior week to 84.7%. Analysts were expecting the refinery run rate to decrease 0.5% to 84.0%.

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