Oil Drops Further as Inventory Soars Almost 5 mmb

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The DOE/EIA reported that total crude oil and petroleum products stocks increased +9.44 mmb to 1053.76 mmb in the week ended January 6. Crude stockpile added +4.96 mmb to 334.65 mmb as stocks in rose in 3 out of 5 PADDs. Cushing stock slipped -0.19 mmb to 29.11 mmb. Utilization rate increased +0.60% to 85.6%.

Gasoline inventory gained +3.61 mmb to 223.80 mmb as demand dropped -4.41% to 8.18M bpd. Production plunged -2.20% to 8.74M bpd while imports plummeted+39.51% to 0.44M bpd. Distillate inventory soared +3.99 mmb to 147.56 mmb as demand slid for an 8th consecutive week, by -7.06% to 3.28M bpd. Imports slipped -28.82% to 0.16M bpd while production dipped -1.61% to 4.75M bpd during the week.

Crude oil prices extended losses after the report as inventories of both crude oil and fuel products gained more than previously anticipated. The front-month contract for WTI crude oil slid to as low as 100.55 before rebound. Oil prices have recently torn between also affected by uncertain sovereign debt problems in the Eurozone, and geopolitical tensions over Iran and protests in Nigeria.

Weekly change in inventory as of 06/01/11

Crude oil
334.65 mmb
+4.96 mmb
+1.00 mmb
+2.21 mmb

223.80 mmb
+3.61 mmb
+2.25 mmb
+2.48 mmb

147.56 mmb
+3.99 mmb
+2.25 mmb
+3.22 mmb

Comparison between API and EIA reports:


API (Dec 30)
EIA (Dec 30)

Forecast (using API's inventory level)

Crude oil
+0.40 mmb
334.88 mmb
-5.12 mmb
+7.00 mmb

+1.89 mmb
220.99 mmb
+3.38 mmb
219 mmb

+0.85 mmb
146.25 mmb
+5.25 mmb
+5.05 mmb
145 mmb


API collects stockpile information on a voluntary basis from operators of refineries. Data from the API and DOE have moved in the same direction 71% of the time over the past 52 weeks

Source: Bloomberg, API, EIA

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