Crude Inventories Rise, Price Slips

The U.S. Energy Information Administration (EIA) released its weekly petroleum status report this morning. U.S. commercial crude inventories rose by 3.8 million barrels last week, bringing the total U.S. commercial crude inventory to 364.5 million barrels, above the upper limit of the five-year range for this time of the year.

The American Petroleum Institute estimate called for a weekly crude inventory rise of 5.46 million barrels and an decrease of 2.4 million barrels to the gasoline supply. Crude prices, which had been slipping today, have continued to slide following today’s report from the EIA.

The impact of Hurricane Isaac, which has closed essentially all crude production in the Gulf of Mexico, is also having an impact on crude prices today, but the inventory levels indicate that the temporary closures are not likely to have a significant effect on the price of domestic crude.

Total gasoline inventories decreased by 1.5 million barrels last week and remain in the lower half of the five-year average range. Over the last four weeks, gasoline supplied has declined by 1% compared to the same period last year. Total motor gasoline supplied averaged 9.1 million barrels a day for the four weeks — a drop of 6.2% compared with the same period a year ago.

For the past week, crude imports averaged 9.5 million barrels a day, an increase of 1.3 million barrels a day from the previous week. Refineries were running at 91.2% of capacity, with daily input of 15.4 million barrels a day, down just 58,000 barrels a day from the previous week.

Distillate inventories, which include diesel fuel, rose by 900,000 barrels last week and are below the lower limit of the average range. Distillate product supplied averaged 3.6 million barrels a day last week, down 6.2% when compared with the same period last year. Distillate production totaled 4.7 million barrels a day last week.

The United States Oil ETF (NYSEMKT: USO) is down 0.7% at $35.55 in a 52-week range of $29.02 to $42.30.

The United States Gasoline ETF (NYSEMKT: UGA) is down 0.2% at $59.22 in a 52-week range of $44.65 to $60.10.

Paul Ausick