API Distillate Supplies Fall: Economic Insight (Update1) - Bloomberg
By Stephen Voss
(Adds previous week's crude oil inventory drop in 8th
paragraph. Adds analyst reaction beginning in 12th paragraph.)
New York, Feb. 8, 18:25 (Bloomberg) -- The following is a summary of
-- and reaction to -- the American Petroleum Institute's weekly
report on U.S. oil inventories and production. The report covers
the week ended Feb. 4.
Market Reaction
Limited. U.S. distillate fuel supplies fell a greater-than-
expected 5.9 million barrels, or 5.3 percent, to their lowest
level in almost three years, the API report showed. The fourth
straight weekly decline in the inventories, which include heating
oil and diesel, came amid strong winter demand for heating fuels,
particularly in the Northeast.
Inventories of crude oil and gasoline rose, about as
expected. The API revised the previous week's figures for all
three categories.
Heating oil futures rose in electronic trading on the New
York Mercantile Exchange after the report was released. Heating
oil for March delivery recently was up 0.56 cent at 73.40 cents a
gallon. Crude for March delivery was little changed at $28.12 a
barrel, up 10 cents.
Behind the Numbers
Distillate supplies fell to 105.97 million barrels, the
lowest level since May 23, 1997, API figures showed. Eight
analysts surveyed by Bloomberg News expected declines ranging from
3.2 million to 4.4 million barrels, based on the average high and
low estimates.
Distillate inventories normally fall at this time of year
because of strong heating oil demand.
Crude oil supplies rose 689,000 barrels to 283.321 million
barrels, rebounding from a revised 23 1/2-year low of
282.63 million barrels the week before. Analysts expected a gain
of between 600,000 barrels and 1.8 million barrels.
That did little to offset the revised drop of 8.9 million
barrels during the week ended Jan. 28, originally reported by the
API as a 10.4 million-barrel decline. The API raised the inventory
figure for that week by 1.47 million barrels.
Refinery utilization unexpectedly plunged 3.3 percentage
points to 84.4 percent of normal capacity, its lowest level since
March 1993. The analysts predicted a rise of between 0.1 and 0.4
percentage points.
Two of the eight analysts had cautioned that utilization
might drop because of narrow profits for refining crude oil and
the need to perform maintenance on refineries to prepare for the
gasoline-making season.
Gasoline inventories rose 1.93 million barrels to
200.52 million barrels, the API said, compared with the expected
gain of between 700,000 barrels and 1.6 million barrels.
What Experts Say
``Initially I thought the report was supportive for crude,'
said Jim Fiedler, a trader at ED&F Man International in New York.
``We did not come back much from last week's draw, and we saw a
small draw in Padd 2, which is critical for the Nymex'
Crude oil supplies fell 261,000 barrels to 60.53 million
barrels in the ``Padd 2' region of the U.S., which includes
Cushing, Oklahoma, the delivery point for Nymex crude oil futures
contracts.
The drop in supplies of distillate fuels ``was at the high
end of people's estimates, in fact a bit more than expected, so
that's positive,' Fiedler said.
``Gasoline is awfully low, so getting a small build may keep
the politicians off our back for a while,' he said.
quote.bloomberg.com |
