The U.S. Energy Information Administration (EIA) released its weekly petroleum status report this morning. U.S. commercial crude inventories rose by 1.8 million barrels last week, bringing the total U.S. commercial crude inventory to 374.8 million barrels, above the upper limit of the five-year range for this time of the year.

Total gasoline inventories rose by 2.9 million barrels last week and are now in the middle of the five-year average range. Total motor gasoline supplies averaged nearly 8.6 million barrels a day over the past four weeks — a rise of 0.2% compared with the same period a year ago.

According to American Petroleum Institute reports, crude supplies fell by 27,000 barrels, while gasoline supplies rose by 1.4 million barrels for the week ended November 2. Platts is estimating a build of 1 million barrels in the crude inventories and a drawdown of 1 million barrels in gasoline and 2 million barrels in distillates, including heating oil.

Crude prices, which had fallen to about $86.22 a barrel before the report was released, have fallen to around $85.90 a barrel following the EIA report and are down about 3.3% on the day so far.

For the past week, crude imports averaged 8 million barrels a day, an increase of about 89,000 barrels a day from the previous week. Refineries were running at 85.4% of capacity, with daily input of 14.7 million barrels a day, about 183,000 barrels a day less than the previous week.

Distillate inventories rose by 100,000 barrels last week and remain well below the lower limit of the average range. Distillate product supplies averaged more than 3.6 million barrels a day over the past four weeks, down 15.3% when compared with the same period last year. Distillate production totaled nearly 4.6 million barrels a day last week, up by about 100,000 barrels a day from the prior week.

The rise in inventories is most likely due to the shutdown of two major refineries due to Hurricane Sandy. The sharp rise in gasoline inventories is also due to the storm. The one area of concern about supplies is distillates, including heating oil, where the drop in production will drive up the cost of heating fuel primarily in the Northeast.

The United States Oil ETF (NYSEMKT: USO) is down more than 3% at $31.38, in a 52-week range of $29.02 to $42.30.

The United States Gasoline ETF (NYSEMKT: UGA) is down about 3% at $54.72. The 52-week range is $44.98 to $62.13.

Paul Ausick

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