Commodities remained strong ahead of US opening. Indeed, the easing pledge from the Fed has boosted speculations of higher commodity demand. This has helped temporarily alleviate ongoing concerns over the sovereign debt crisis in the Eurozone. Oil prices strengthened with the front-month contract for WTI crude oil rising to a 4-day high of 100.46 earlier in the day while the equivalent Brent crude contract also soared to 111.40, also the highest in 4 days.

According to the DOE/EIA weekly report, total crude oil and petroleum products stocks fell -4.28 mmb to 1047.42 mmb in the week ended January 20. Crude stockpile rose +3.56 mmb to 334.77 mmb as stocks gained in 4 out of 5 PADDs. Cushing stock added +0.37 mmb to 28.65 mmb. Utilization rate decreased -1.50% to 82.2%.

Gasoline inventory slipped -0.39 mmb to 227.13 mmb although demand increased +1.28% to 8.10M bpd. Production declined -2.83% to 8.54M bpd while imports rose +30.56% to 0.72M bpd. Distillate inventory dropped -2.46 mmb to 145.55 mmb as demand gained for the second consecutive week, by +6.91% to 3.89M bpd. Imports slipped -33.33% to 0.15M bpd while production dipped -2.01% to 4.39M bpd during the week.

A series of economic data will be released in the NY session. Durable goods orders probably grew +2.0% m/m in December, easing from +3.8% a month ago. Excluding transportation, growth might have risen +0.9%, up from +0.3% in November. Initial jobless claims probably climbed +7K to 365K in the week ended January 21. Leading indicators might have gained +0.7% in December, following a +0.5% gain in the prior month. New home sales are expected to have added +5K to 320K in December.

Weekly change in inventory as of 20/01/11
Actual
Change
Consensus
Previous

Crude oil
334.77 mmb
+3.56 mmb
+3.00 mmb
-3.44 mmb

Gasoline
227.13 mmb
-0.39 mmb
+2.35 mmb
+3.72 mmb

Distillate
145.55 mmb
-2.46 mmb
+1.38 mmb
+0.44 mmb

Comparison between API and EIA reports:

       

 
 
API (Jan 20)
 
 
EIA (Jan 20)
 

 
Actual
Inventory
Previous
 
Forecast (using API's inventory level)
Inventory

Crude oil
7.33 mmb
337.40 mmb
-4.80 mmb
 
+6.19 mmb
337mmb

Gasoline
-0.57 mmb
224.72 mmb
+4.30 mmb
 
-2.80 mmb
225 mmb

Distillate
-2.46 mmb
142.89 mmb
+0.90 mmb
 
+5.12 mmb
143 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