Crude Supply Falls, Gasoline Inventory Soars Again

The US Energy Information Administration (EIA) released its weekly petroleum status report this morning. US commercial crude inventories declined by 2.4 million barrels last week, bringing the total US commercial crude inventory to 371.8 million barrels, still well above the upper limit of the five-year range for this time of the year.

Total gasoline inventories rose by 7.9 million barrels last week and have moved into the upper half of the five-year average range. Total motor gasoline supplied averaged 8.6 million barrels a day over the past four weeks — a rise of 0.1% compared with the same period a year ago.

Distillate inventories jumped by 3 million barrels last week, but still remain well below the lower limit of the average range. Distillate product supplied averaged more than 3.9 million barrels a day over the past four weeks, up 1.8% when compared with the same period last year. Distillate production totaled nearly 4.8 million barrels a day last week, up about 200,000 barrels a day compared with the prior week.

Platts estimated a drawdown of 1.25 million barrels in crude inventories, a gain of 2 million barrels in gasoline stocks, and a build of 800,000 barrels in distillate supplies. The American Petroleum Institute reported a drawdown of 2.2 million barrels in crude supplies last week, while gasoline inventories surged by 5.7 million barrels and distillate inventories climbed 1.1 million barrels. Dow Jones estimated a crude inventory decline of 300,000 barrels, coupled with a rise of 1.8 million barrels in gasoline stocks and a rise of 600,000 barrels to distillate stocks.

Crude prices were flat before the EIA report at $88.47 a barrel and have retreated slightly since. The threat from the fiscal cliff continues putting pressure on crude prices, and investors’ appetite for risk is fading as negotiations over the federal deficit stall.

For the past week, crude imports averaged 8.2 million barrels a day, an increase of about 112,000 barrels a day from the previous week. Refineries were running at 90.6% of capacity, with daily input of 15.4 million barrels a day, about 255,000 barrels a day more than the previous week.

The United States Oil ETF (NYSEMKT: USO) is essentially flat at $32.41 in a 52-week range of $29.02 to $42.30.

The United States Gasoline ETF (NYSEMKT: UGA) is down about 0.8% at $56.33. The 52-week range is $45.13 to $62.13.

Paul Ausick