Analysis of EIA data:

Distillate stocks plunge; Commercial crude stocks fall

New York - November 9, 2011

US distillate stocks plunged 6.020 million barrels to 135.869 million barrels during the week ending November 4, with exports to South and Central America sparking the decline, according to the US Energy Information Administration (EIA) Wednesday.

Distillate stocks fell even as US demand was down only 12,000 barrels per day (b/d) to 4.362 million b/d, which is also some 32,000 b/d below year-ago levels.

The EIA does not survey the market on exports, instead it recieves its data on a two-month lag from the US Census Bureau. The EIA Wednesday reported distillate exports at 912,000 b/d for the week ending November 4, up from 737,000 b/d a year earlier, based on Census Bureau data.

James Beck, lead analyst of the EIA's weekly petroleum supply team, told Platts that large stock draws that do not translate to higher US demand figures are thought to be unaccounted exports. Beck said the export figure could be as high as 1.1 million b/d, citing press reports and other analyst research.

For demand figures, Beck said the EIA data is based on information from its primary system but secondary systems, or storage held by producers with small tonnage, is not represented in the data and could lead to disparities or a lag in reported demand figures.

Within distillates, stocks of ultra low sulfur diesel declined 3.7 million barrels to 90.4 million barrels, while heating oil stocks fell 1.9 million barrels to 36.7 million barrels.

The distillate stock level far outpaced analyst expectations of a 2.5-million-barrel draw, and the American Petroleum Institute's (API) reported 2.881 million-barrel decline.

US commercial crude stocks fell 1.370 million barrels to 338.090 million barrels amid a 336,000 b/d drop in crude imports to 8.618 million b/d. Inventories declined contrary to analysts’ expected one-million-barrel build and the API's reported rise of 148,000 barrels.

Midwest crude stocks fell 1.032 million barrels to 92.186 million barrels.

At Cushing, Oklahoma – home of the New York Mercantile Exchange’s crude oil futures contract delivery point – stocks declined 932,000 barrels to 31.139 million barrels, remaining 8.395 million barrels above the five-year average.

Refiners reduced runs, with US inputs dropping by 358,000 b/d to 14.335 million b/d, less than the five year average of 14.476 million b/d. Refinery utilization also declined by 2.7 percentage points to 82.6% of capacity, outpacing analysts’ expectations for a 0.1-percentage-point drop in runs.

Domestic gasoline stocks declined 2.107 million barrels to 204.167 million barrels last week, according to EIA data, more than analysts expectations of a 400,000-barrel draw.

On the US Atlantic Coast, gasoline stocks fell 1.752 million barrels to 51.101 million barrels and remain 824,000 barrels less than the five-year average.

Gasoline stocks fell as demand rose to 8.671 million b/d, up 153,000 b/d. However, demand is still 385,000 b/d below year-ago levels.

A decline was also seen in gasoline imports, which fell 31,000 b/d to 750,000 b/d. Gasoline imports remain 99,000 b/d less than the five year average.

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