DOE Update: Surplus Drops for First Time in Nine Weeks

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Includes: ANDV, OIH, SUN, USO, VLO, XLE
by: Sumit Roy

Inventories

The Department of Energy reported that in the week ending September 10th, 2010, U.S. crude oil inventories decreased by 2.5 million barrels, gasoline inventories decreased by 0.7 million barrels, distillate inventories decreased by 0.3 million barrels, and total petroleum inventories decreased by 2.9 million barrels.

The total petroleum surplus to the 5-year average decreased for the first time in nine weeks. The surplus now stands at 108.737 million, or 10.5% above the 5-year average, down from 10.7% in the prior week. Nine weeks ago the surplus was close to 65 million, or 6.3%.

Crude oil inventories decreased in seasonal fashion, but the overall surplus to the 5-year average increased to 42.129 million barrels, or 13.4%, up from 12.9% a week ago.

Product inventories decreased as refiners cut production and imports plunged. The gasoline surplus to the 5-year average stands at 13.8%, down from 14.4% last week, while the distillate surplus stands at 21.9%, down from 23.5% last week.

Demand

Demand decreased 1% week-over-week. YOY demand growth has been slowing. Over the last four-weeks, total petroleum demand has averaged 0.7% higher than the year ago period. Gasoline demand is up 0.5% YOY and distillate demand is up 11.5% YOY.



Imports

Crude oil imports increased 0.1 million barrels per day after plunging 1.9 million barrels per day a week earlier. Over the last four weeks, imports have averaged 9.4 million barrels per day, 0.2 million barrels per day higher than the year ago period.



Refinery Activity

Refinery utilization decreased to 87.6% from 88.2% in the prior week. Both gasoline and distillate production are higher than a year ago.



Miscellaneous

U.S. crude oil production fell 0.5% week-over-week after hitting a six-year high last week. Year-to-date oil output is up 3.9% from the year ago period.

Inventories at the NYMEX delivery point, Cushing, Oklahoma decreased 0.6 million barrels week-over-week.

Disclosure: None