Posted in: Commentary,
by Patrick DeHaan on Mar 18, 2010 01:32
Here are some highlights from yesterday's Department of Energy Report on U.S. supply and demand:
>Crude inventories increased 1.0 million barrels from the previous week.
Comment: This is a pretty small increase compared to past reports, but brings the amount of oil in storage to 344.0 million barrels, which is 4.1% below last year, when we had 358.8 million barrels in storage.
>Gasoline inventories decreased 1.7 million barrels from the previous week.
Comment: While this number may seem to be a decent number, conventional gasoline inventories actually increased while blending components decreased over 2 million barrels. The loss in blending component inventories may be a result of refiners drawing down on components used in winter-spec gasoline, a specification that won't be in use in the upcoming weeks. Overall, gasoline inventories are up 5.2% over last year, only because blending components have increased 13.1% during the same time. Conventional and reformulated inventories are down 6.1% and 11.1%, respectively.
>Distillate inventories decreased 1.5 million barrels from the previous week.
Comment: West Coast refiners have been sending some of their distillate fuels (in the form of diesel) to Chile in recent weeks as facilities in Chile try and overcome earthquake damage sustained in last months massive earthquake. Distillate inventories had posted double digit increases vs. last year this past winter, but that advantage has evaporated. Distillate inventories are now just 2% higher than a year ago.
In other notes, propane/propylene inventories have dropped some 37% since last year, so if you notice higher propane prices, don't be shocked. Oil imports to the United States fell last week to just 9.6 million barrels, a 7.7% drop over a year ago, while products supplied increased to 19.3 million barrels, a rise of 3.5% over year ago. A combination of low imports and higher products supplied are a main reason for the drop in crude oil inventories over last year. Over the last four weeks, crude oil inventories have climbed nearly 7 million barrels. Gasoline inventories have fallen the last four weeks, but for this time of year, that's not surprising. The SPR (Strategic Petroleum Reserve) remains near its current capacity of 726.6 million barrels, but with expansion looming, soon the capacity will increase to nearly one billion barrels.