EIA ANALYSIS: Oil stocks falling despite build in commercial crude

24 Feb 2022

Quantum Commodity Intelligence - Crude stocks built in the US last week and there was a ramp up in refinery production, particularly in the north-east, but there was still a drop in total US oil stocks.

Commercial crude stocks gained 4.5 million barrels over the week to February 18, more than the 2.4 million barrel draw in strategic stocks.

The Energy Information Administration  thinks the increase was largely down to a surge in imports of crude, up more than 1 million bpd over the week to over 6.8 million bpd.

Even with a build, commercial crude stocks were still down 9% on their five-year averages.

Refineries used more crude.

Utilization rates improved, and crude throughput rose almost 350,000 bpd over the week to around 15.25 million bpd.

There were still small draws of 600,000 barrels in both gasoline and distillate stocks over the week.

Both gasoline and distillate demand were little changed at 8.65 million bpd and 4.23 million bpd respectively.

Total oil and product stocks, including the strategic releases, continued to slide, down another 4.3 million barrels over the week to 1,741.5 million barrels.

Since the end of December 2021, US oil and product stocks have fallen 46.9 million barrels at a time when analysts previously expected OECD inventory stocks to start rebuilding.

The big fall last week was propane, buoyed by the rally in both naphtha and natural gas prices before the Russian invasion of Ukraine.

Propane stocks were down 3.9 million barrels to just 38 million barrels, leaving them 22% below the five-year average for this time of year.

Distillate stocks were 18% below the five-year average.

Only gasoline stocks looked reasonable among the major products, with stocks down 3% on five-year averages.

US refiners are responding to the product shortages, with east coast utilization rates jumping to 90.8% last week, up from just 78.5% a week earlier, and mid-west rates improving to 96%, up from 92.4%.

Guld Coast refiners, accounting for about half US capacity, increased their utilization rates to 85.8% from 83.5%.