DOE ANALYSIS: Higher crude imports drive unexpected stock build

New York (Platts)--29Dec2005

A surge in crude imports arriving in the US Gulf Coast and Midwest last
week overwhelmed a modest rise in crude inputs to refineries, resulting in an
unexpected 100,000 bbl build in US commercial crude inventories, an analysis
of Energy Information Administration stock data showed Thursday.

     Analysts had projected a 2.4-mil bbl draw, expecting refiners, for tax
considerations, to run lean inventories heading into the end of the year.

     PADD-3 (Gulf Coast) crude imports rose 628,000 b/d to 6.514-mil b/d,
while PADD-2 (Midwest) imports rose 122,000 b/d to 1.152-mil b/d, the highest
since the week ending Aug 5. Crude inventories at Cushing, Oklahoma, the
delivery point of the New York Mercantile Exchange's light, sweet crude
contract, rose 1-mil bbl to 22.1-mil bbl, their highest since Apr 29.

     Overall US crude stocks are now nearly 33.3-mil bbl above the five-year
average, the highest surplus since the week ending Sep 21, 1990, according
to the EIA. However, since crude inputs to refineries are nearly 800,000 b/d
higher now than 15 years ago, demand cover this week was 21.38 days, compared
with 25.68 days in September 1990.

     Crude runs rose by 165,000 b/d week-on-week to 15.087-mil b/d, pushing
refinery utilization up to 88.9%. Overall refining yields surged 1.8%, to
99.23%, the EIA data showed.

     Overall product demand remained strong over the past four weeks, running
415,000 b/d above the same time of last year. Unleaded gasoline production
edged 173,000 b/d higher to 8.867-mil b/d on the back of the higher crude runs
and yields, as the gasoline yield rose 0.6% to 58.2%. Despite the higher
production and just a small drop in imports to 960,000 b/d, total gasoline
stocks fell by 1.2-mil bbl, slightly higher than expectations. Gasoline demand
slipped 77,000 b/d last week, but over the last four weeks was still 92,000
b/d over year-ago levels.

     Distillate stocks also slipped, falling 900,000 bbl despite a 199,000 b/d
rise in production. A drop in imports helped to keep stocks from building, as
did continued strong demand due to sky-high natural gas prices.

     Residual fuel demand also benefitted from fuel-switching by end users
seeking a cheaper alternative to natural gas for power plant fuel. Over the
past four seeks, resid demand has run more than 26% above year-ago levels. A
surge in PADD-1 (US East Coast) imports and production kept stocks nearly
unchanged.

		--Dave Marino, david_marino@platts.com

     For more information, take a trial to Platts Global Alert at
http://globalalert.platts.com.

Please visit: www.platts.com

Their coverage of energy matters is extensive!!.