Crude oil prices have
dropped recently following the latest weekly oil data
report (ending 18 April) from the US. US crude stocks surged by 9 mb last
week, according to US government data, while the American Petroleum Institute
reported an even bigger gain of 13.1 mb.
But the Energy Information Administration
(EIA) has warned that despite the
big jump in US crude stocks, US inventories of crude and petroleum products
remain uncomfortably low. The EIA said last week's US crude oil imports
surged to 10.6 million barrels per day on average, breaking the record set
just three weeks earlier. However, it said that because inventories across
all oil products
are starting from such low levels, "even with imports
pouring in at record levels, it will still take months, not weeks to return
inventories to normal".
The latest EIA report (for the week ending 18 April 2003) showed that US
stocks of crude had increased by almost 9 million barrels to stand at 286.2
million barrels, i.e. 41.6 million barrels below the level at this time last
year and more than 40 million barrels below the average for the past five
Stocks of gasoline and distillates are also down for the time of year. At
201.2 million barrels, US stocks of gasoline are 4.3% below the 5-year
average and 6.5% below the level at this time last year, so are in fact
closer to "normal". But demand for gasoline has increased in the US over the
past 2 years, although only slightly so far this year.
Last week's 0.7 mb draw in gasoline stocks came despite high refinery output
and more than 1 mbd of imports. Normally, gasoline stocks grow during April
and May until increased demand starts drawing down inventories. That means
more crude should be going into refineries to boost gasoline production,
which in turn means less crude will be going into storage.
The EIA also pointed out that stocks of heating oil could come under pressure
towards winter, as distillate stocks remain very low for the time of year. At
96.1 million barrels, US stocks of distillates are 21.7% below this time last
year and 16.6% below the 5-year average.
In summary, the EIA said that "while record-setting import levels are an
encouraging sign, they will need to be sustained at very high levels this
summer to rebuild inventories to more comfortable levels".
Much of the extra imports reported last week included Iraqi barrels loaded
before the war. Because Iraqi exports have been suspended since mid-March and
have not yet restarted, the EIA said US oil imports are likely to be
considerably lower in the next couple of weeks than the record of last week.