Crude Tumbles Despite Declines in Total Petroleum Inventories

ONG Focus | Insights | Written by Oil N' Gold | Wed Nov 03 10 11:19 ET

Total crude oil and petroleum products stocks slumped -5.46 mmb to 1127.32 mmb in the week ended October 29. This is the lowest level since August 2010. Although crude oil inventory rose +1.95 mmb to 368.16 mmb, fuel stockpiles dropped further. Crude stock builds last week concentrated in the Gulf Coast (+1.25 mmb) and the West Coast (+3.05 mmb) while the East Coast, Midwest and Rocky Mountain all recorded dips. Utilization rate fell -1.9% to 81.8% after rising over the past 2 weeks.

Concerning oil products, both gasoline and distillate stockpiles declined during the week. Gasoline inventory fell -2.69 mmb to 212.25 mmb while that for distillate dipped -3.57 mmb to 164.87 mmb. Gasoline demand slid for the first time in 3 weeks, by -3.67% to 9.02M bpd. However, both production (-2.53%) and imports (-12.81%) dropped, offsetting the pile-up. Distillate demand (+1.03%) crawled higher but the pace decelerated from the past 2 weeks. The draw in stockpile was also driven by declines in production (-3.20%) and imports (-51.58%).

WTI crude oil spiked to 85.36 immediately after the report. Price then tumbled and broke below 84 as investors took profit ahead of Fed's announcement. US data released today came in better than expected, raising worries that Fed's easing measures may be mild.

Weekly change in inventory as of 29/10/10

Comparison between API and EIA reports: Forecast (using API's inventory level)

API collects stockpile information on a voluntary basis from operators of refineries, 76% of the time, using data in the past 4 years.

Source: Bloomberg, API, EIA

 

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