EIA analysis: demand heads back up

US refined oil product demand climbed 231,000 barrels per day (b/d) to 19.037 million b/d the week ending June 17, but overall, product stocks increased on higher refiner output, an analysis of US Energy Information Administration (EIA) data showed Wednesday.

This analysis and commentary is provided by Linda Rafield, Platts senior oil analyst and editor of the weekly Futures and Derivatives Review, a supplement to Platts Oilgram Price Report.

On a four-week moving average, US product demand at 19.05 million b/d was 531,000 b/d below year-ago levels.

On a four-week moving average, refinery run rates at 15.42 million b/d were 134,000 b/d less than year-ago levels, despite a 547,000-b/d jump in inputs to 15.788 million b/d the week ending June 17. This is the highest level of refinery run rates since the week ending August 13, 2010.

A 511,000-barrel increase in crude imports to 9.149 million b/d was able to moderate the crude stock draw of 1.711 million barrels, which is slightly lower than analysts’ expectations for a 2-million-barrel draw.

Crude stocks have decreased approximately 10 million barrels throughout the past month, in line with seasonal tendencies.

While total US crude stocks declined, inventories at the New York Mercantile Exchange (NYMEX) futures contracts delivery point rose 273,000 barrels to 38.036 million barrels.

As a result of high refinery output, US product stocks rose 4.806 million barrels to 701.563 million barrels, having cumulatively increased 31.108 million barrels throughout the past two months.

While gasoline stocks fell 464,000 barrels to 214.601 million barrels, middle distillates inventories rose 1.173 million barrels. Analysts polled by Platts projected a 1-million-barrel build of in gasoline stocks and an increase of 800,000 barrels in middle distillates.

At 214.601 million barrels, gasoline stocks were 4.557 million barrels greater than the five-year average, but 2.977 million barrels less than year-ago levels.

At 141.994 million barrels, stocks of middle distillates were 7.236 million barrels more than the five-year average, but 14.925 million barrels less than year-ago levels.

Gasoline demand was essentially unchanged week over week, but at 9.321 million b/d on a four-week moving average, consumption was 84,000 b/d greater than year-ago levels despite a 90.9-cent increase to year-ago retail prices at the pump.

The national average was $3.65 per gallon (/gal) for all formulations as of June 20, according to the EIA. This is 6.1 cents/gal less than week-ago prices and 30 cents/gal less than prices seen during the past six weeks – an indication that that consumption has been fairly resilient despite high prices.

Middle distillate consumption remains lower than year-ago levels, down 223,000 b/d at 3.668 million b/d. While this may reflect a drop in road and rail traffic as a result of a slowing in the economy, implied demand* for middle distillates tends to tapers off at this time of year.

Platts