Things You Should Know About the EIA Crude Inventory Report

The U.S. Energy Department's inventory release showed that crude stocks recorded a weekly increase that was much larger than anticipated. On a bullish note though, the report revealed that refined product inventories – gasoline and distillate – both fell from their previous week levels.

Below we review the EIA's Weekly Petroleum Status Report for the week ending Sep 27.

Analysis of the EIA Data

Crude Oil: The federal government’s EIA report revealed that crude inventories rose by 3.1 million barrels, compared to the 1.3 million barrels increase that energy analysts had expected. Seasonal maintenance, which kept refining rates low last week, largely drove the bigger-than-anticipated stockpile build with the world's biggest oil consumer. This puts the total domestic stocks at 422.6 million barrels – 4.6% above the year-ago figure and essentially at their five-year average.

Meanwhile, the oil market drew some support from stockpile draw at the Cushing terminal in Oklahoma. The key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange saw inventories edge down 201,000 barrels to 40.7 million barrels

The crude supply cover was up from 24.6 days in the previous week to 25.3 days. In the year-ago period, the supply cover was 23.6 days.

Turning to products, and it is a fairly positive story.

Gasoline: Gasoline supplies fell slightly – by 228,000 barrels – as production of the fuel decreased by 159,000 barrels per day to 10.1 million barrels per day. Analysts had forecast 308,000 barrels climb. At 230 million barrels, the current stock of the most widely used petroleum product is 2.2% below the year-earlier level but exceeds the five-year average range by 3%.

Distillate: Distillate fuel supplies (including diesel and heating oil) were down 2.4 million barrels last week on higher demand and lower production, while analysts were looking for an inventory draw of 2.2 million barrels. Current supplies – at 131.3 million barrels – are 3.5% lower than the year-ago level and remain 8% below than the five-year average.

Refinery Rates: Refinery utilization was down 3.4% from the prior week to 86.4%.

About the Weekly Petroleum Status Report

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 United States, 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 the businesses of the companies engaged in the oil and refining industry.

The data from EIA generally acts as a catalyst for crude prices and affects producers, such as ExxonMobil XOM, Chevron CVX and ConocoPhillips COP and refiners such as Valero Energy VLO, Phillips 66 PSX and Marathon Petroleum MPC.

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