By U.S. gasoline stocks jumped 7.412 million barrels to 233.085 million barrels for the reporting week ended January 4, U.S. Energy Information Administration (EIA) data showed Wednesday.
The stock build echoes the American Petroleum Institute (API) figure released Tuesday, which showed U.S. gasoline inventories rose 7.931 million barrels. Analysts polled Monday by Platts expected an increase of 2.6 million barrels.
The primary driver for the increase was a sharp drop in demand, or total finished motor gasoline supplied. EIA data showed U.S. gasoline demand fell 508,000 barrels per day (b/d) last week to 8.010 million b/d.
Imports of gasoline remained steady at 447,000 b/d, down slightly from 487,000 b/d week-on-week. However, market sources have recently said that around 300,000 metric tons (mt) of European gasoline could be headed to either the U.S. or South America by January 20, triggered in advance by the onset of planned, but heavy, U.S. refinery maintenance later in the month.
Meanwhile, U.S. gasoline production fell 197,000 b/d to 8.739 million b/d, the lowest level in nearly a year.
Gasoline stocks in the U.S. Midwest alone rose 3.133 million barrels to 55.344 million barrels last week, the highest inventories since March 2012 and putting levels 8.65% above the EIA five-year average.
Over the past eight weeks Midwest gasoline stocks have jumped nearly 11 million barrels. This is likely due to steady refining margins in the region, which have continued to outperform margins in other regions of the United States.
Midwest West Texas Intermediate (WTI) crude oil cracking margins have declined during the past month, as have all other margins. Yet WTI cracking margins have steadily been above $20 per barrel on a 30-day moving average, according to Platts data and Turner, Mason and Co. yield formulas.
U.S. West Coast (USWC) gasoline stocks also rose for the latest reporting week, up 2.159 million barrels to 36.142 million barrels. USWC gasoline stocks have climbed 9.711 million barrels since mid-September, creating a surplus to the five-year average.
Inventories were 15.29% greater than the five-year average last week and up from a 6.65% deficit the week ending September 21.
A surplus has increased in the U.S. Gulf Coast (USGC) as well, where stocks last week climbed 1.153 million barrels to 81.423 million barrels. This puts stocks 14% higher than the five-year average.
Stocks on the U.S. Atlantic Coast (USAC), home to the New York Harbor-delivered New York Mercantile Exchange (NYMEX) RBOB contract, rose 962,000 barrels to 52.933 million barrels. However, the deficit to the EIA five-year average rose slightly to 9.78% from 8.67% a week prior.
U.S. distillate stocks also jumped significantly in the latest reporting week, rising 6.777 million barrels to 130.744 million barrels. The inventory rise was largely attributable to increased stocks of ultra low sulfur diesel (ULSD).
EIA data shows that demand for U.S. distillates fell last week to its lowest level since July 2009, dropping 170,000 b/d to 3.086 million b/d. Analysts polled by Platts expected U.S. distillate stocks to increase 1.5 million barrels.
Atlantic Coast ULSD stocks rose the most, up 2.506 million barrels to 25.568 million barrels, with both the Central and Lower Atlantic regions accounting for the bulk of the build.
Combined low and ultra low diesel stocks on the USAC have risen 10.52 million barrels since mid-November, deteriorating the deficit against the five-year average, the EIA data shows. Combined stocks, at 26.136 million barrels last week, were just 2.97% below the average, following a deficit of nearly 40% for the week ending November 16.
Likewise, last week's combined low and ultra low diesel stocks in the Midwest of 29.685 million barrels were 9.75% greater than the five-year average, up from a 7% deficit the week ending December 7. Midwest ULSD stocks rose 1.794 million barrels to 28.580 million barrels. Last week's combined low and ultra low stocks on the West Coast of 14.314 million barrels were 10.07% more than the five-year average. West Coast ULSD stocks rose 1.022 million barrels to 13.356 million barrels.
In contrast, combined diesel stocks in the USGC remained tight. At 31.31 million barrels last week, stocks were 12.9% less than the five-year average.
Exports of ULSD from the region have risen in recent years, making it more difficult to maintain a surplus. Gulf Coast ULSD stocks rose 753,000 barrels to 28.634 million barrels.
U.S. crude oil stocks climbed 1.314 million barrels last week to 361.253 million barrels, primarily on a jump in imports, data released by the EIA Wednesday showed. Imports for the period climbed 1.248 million b/d to 8.342 million b/d. The crude stock build followed an 11.12 million-barrel draw the prior week, which was attributed to USGC refiners cutting inventories for year-end tax purposes.
USGC crude stocks tend to decline during December before picking back up in the new year.
However, USGC crude stocks fell 1.876 million barrels the week ending January 4 to 162.571 million barrels, the EIA data showed. Imports into the region climbed only 108,000 b/d to 3.715 million b/d. That was down 820,000 b/d from the week ending December 7.
Crude imports from Saudi Arabia -- the bulk of which land in the USGC -- climbed 392,000 b/d to 1.295 million b/d last week.
While the USGC still has a surplus of crude oil to the five-year average, that surplus has narrowed in recent weeks. Stocks were 4.05% greater than the five-year average last week and down from a surplus of nearly 12% for the week ended December 21.
The USGC crude stock draw was offset by inventory builds in the Midwest and USAC. Midwest stocks climbed 1.772 million barrels to 115.146 million barrels, putting stocks at a new all-time high, which exceeds the five-year average by 36.41%.
Stocks at the NYMEX crude oil futures contract delivery point of Cushing, Oklahoma, climbed 332,000 barrels to an all-time high of 50.082 million barrels. Market observers believe Cushing stocks may begin to draw, however, as capacity on the Seaway crude pipeline increases. Capacity on the line, which ships crude from Cushing to the USGC, is expected to increase to 400,000 b/d from 150,000 b/d by the end of this week.
Midwest crude imports climbed 76,000 b/d last week to 1.964 million b/d, the EIA data showed.
USAC crude imports jumped 1.248 million b/d to 8.342 million b/d, pushing crude stocks in the region up 1.862 million barrels to 10.978 million barrels.
Crude imports from Nigeria -- the bulk of which arrive on the USAC -- rose 339,000 b/d to 586,000 b/d, the EIA data showed.
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