Oil Storage Report - Feb 14

[dan_s]

Comments from Raymond James:

This week's petroleum inventories update was mixed relative to consensus estimates for inventory changes. ''Big Three'' inventories (crude - including SPR, gasoline, distillates) rose by 5.4 MMBbls, higher than consensus estimates calling for a build of 4.9 MMBbls and the seasonal norm of a build of 3.5 MMBbls. Crude inventories rose by 2.3 MMBbls, versus consensus calling for a build of 3.1 MMBbls - with commercial crude rising 1.9 MMBbls and the SPR up 0.4 MMBbls. Cushing crude inventories fell once again, this time by 3.6 MMBbls, while Gulf Coast inventories rose significantly once again (up by 6.1 MMBbls).

Gasoline posted a larger than expected build (3.6 MMBbls), while distillate inventories fell by 0.5 MMBbls, versus expectations for flat inventory levels week on week. Total petroleum inventories fell 2.7 MMBbls. As always, regardless of their week-to-week movements, U.S. inventories do not constitute a holistic picture of global (or even total OECD) inventories, but they represent the only ''real-time'' data source.

Refinery utilization declined to 89.8% from 92.5% last week, driven largely by refiners commencing annual turnaround maintenance activity. Total petroleum imports were 9.8 MMBbls per day, down from 10.2 MMBbls per day last week. Total petroleum product demand decreased 2.7% after last week's decrease of 0.8%. On a four-week moving average basis, there was a 6.9% y/y increase in total demand. Lower 48 production is estimated at 9,752 MBbls per day, up 25 MBbls per day from last week, and 1,286 MBbls per day above year-ago levels. As always, weekly demand and supply figures are provisional estimates subject to frequent revisions.
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MY TAKE: Crude Oil, Gasoline, Jet Fuel and Propane stocks are now ALL below 30 days of supply. This is the time of year that crude oil inventories MUST BUILD to meet a big spike in demand for gasoline and diesel that is just a few weeks away. Q2 always is the largest Q over Q increase in demand and we are not ready for it this year. Crude oil commercial stocks are only at 25.8 days of supply. Higher NGL prices are offsetting lower natural gas prices for all of the Sweet 16. A cold March will wipe out the remaining propane supply in the Midwest.