EIA: US stocks remain low

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 years.

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. (Source: Intertanko)