The announcement of the Saudi/Russian "production freeze" concept appears to have been successful in lifting world oil prices. However, the large build in crude stocks last week underscores that the concept is having no beneficial impact on actual supplies. U.S. crude imports have risen.
U.S. crude stocks built by 10.4 million barrels (mmb) last week, ending at a new high of 518.0, 73.6 mmb higher than a year ago.
That build boosted crude and petroleum product stocks to 1,346 mmb, also their highest, 164 mmb higher than a year ago.
Although crude oil production over the past four weeks has lagged the same period last year by 1.7%, "other supply," primarily natural gas plan liquids, is up 7.3% in the same comparison.
As a result, total new production is still higher than last year.
Net crude oil imports have rebounded lately, and are 7.7% higher in the year-to-date v. the same period in 2015. The caveat here is that crude exports are estimated by a highly flawed EIA model.
Gasoline demand, at the primary storage level, has surged. It has been 6.9% higher over the past four weeks than last year.
But it not been enough to pull total product demand higher due to much lower distillate fuel demand. Total demand in the past four weeks was off 1.1% v. a year ago.
But gasoline stocks are still 14.9 mmb higher than a year ago.
Distillate stocks rose by 2.9 mmb last week and stand 40.6 mmb higher than a year ago.
Crude oil fundamentals continue to get worse instead of better. Surging gasoline demand is a positive factor for products, but product stocks remain high and total demand trails last year's level.
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