By U.S. gasoline and distillate stocks rose a combined 12.1 million barrels in the reporting week that ended January 3 as implied demand* for refined products hit typically seasonal lows, U.S. Energy Information Administration (EIA) data showed Wednesday.
The build far outpaced a 2.68 million-barrel draw in U.S. crude oil stocks, which was largely expected. Analysts surveyed Tuesday by Platts expected crude oil stocks to fall by around 3.3 million barrels.
U.S. gasoline stocks soared the week ended January 3, jumping 6.24 million barrels to 226.96 million barrels. Analysts had been expecting a smaller, 2 million-barrel build. Distillate stocks also rose far more than expected, climbing 5.83 million barrels. Analysts had expected a build of just 1.9 million barrels.
Gasoline stocks on the U.S. Atlantic Coast (USAC) -- home to the New York Harbor-delivered New York Mercantile Exchange (NYMEX) RBOB contract -- rose a bearish 2.18 million barrels to 59.43 million barrels the week ended January 3. This boosted the surplus to the EIA five-year average to 3.72%, up from 1.56% the week ended December 27.
USAC gasoline stocks are more than 12% above year-ago levels.
U.S. West Coast gasoline stocks rose 2.1 million barrels to 32.43 million barrels, and U.S. Midwest stocks rose 1.47 million barrels to 52.12 million barrels.
Gasoline stocks on the U.S. Gulf Coast (USGC) rose 370,000 barrels to 75.99 million barrels.
The aggregate rise in U.S. gasoline stocks likely comes amid a sharp drop in implied demand, which fell 619,000 barrels per day (b/d) to 8.27 million b/d. This is the lowest implied demand for gasoline has been since this time last year, when it was 8.01 million b/d the week ended January 4, 2013.
On a four-week moving average, U.S. gasoline demand of 8.84 million b/d is about 400,000 b/d higher than a year ago.
That said, U.S. gasoline production rose 42,000 b/d to 9.12 million b/d. But this is still below the record 9.72 million b/d reached in week ended December 20.
The aggregate 5.83 million-barrel build in distillate inventories was largely concentrated in the Midwest and USAC. Midwest distillate stocks rose 2.64 million barrels to 29.88 million barrels. USAC stocks rose 2.27 million barrels to 37.59 million barrels.
The build was a consequence of sharply lower demand, despite awareness of the coming record cold temperatures seen across much of the U.S. this week.
Implied demand for U.S. distillates fell 292,000 b/d to 3.02 million b/d, in line with year-ago levels. However, this is the lowest distillate demand has been since January 7, 2000, when it was 3.007 million b/d.
U.S. distillate production, meanwhile, fell 154,000 b/d to 5.08 million b/d.
USGC stocks fell 364,000 barrels to 39.9 million barrels the week ended January 3.
USGC CRUDE OIL STOCKS PLUMMET
Meanwhile, the aggregate draw in crude oil stocks was led by a massive 6.15 million-barrel draw on the USGC, where stocks fell to 166.28 million barrels. This brought the region's surplus to the EIA five-year average to just below 4%.
While USGC refinery utilization and crude oil runs remained largely flat, imports to the region dropped 410,000 b/d to 3.47 million b/d the week ended January 3.
Imports from Venezuela, much of which head to the USGC, fell 299,000 b/d to 709,000 b/d the week ended January 3. Similarly, imports from Mexico fell 215,000 b/d to 867,000 b/d.
USGC run rates remained at 94.3% of capacity for the second straight week. The region is home to more than 51% of U.S. operable crude oil distillation capacity, and although steady week-over-week, utilization around this time last year was just 88.9%.
Stocks at the NYMEX delivery hub at Cushing, Oklahoma, rose 1.1 million barrels to 40.73 million barrels. Despite the build, the surplus to the five-year average fell to 10.42%.
Total Midwest stocks rose 2.27 million barrels to 111.16 million barrels the week ended January 3 as imports from Canada surpassed record highs for weekly data, rising 323,000 b/d to 2.84 million b/d.
The more definitive EIA monthly data shows Canadian imports were at an all-time high of 2.82 million b/d in February 2013.
* Implied demand is the amount of product that moves through the U.S. distribution system, not actual end consumption.
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