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Americas: USGC ULSD stocks see sharp draw for second week: EIA

https://www.chemnet.com   Apr 22,2011 Platts
Ultra low sulfur diesel stocks saw sharp weekly draws last week for a second week in the US Gulf Coast as demand rose and refiners continued to troubleshoot issues, data released by the US Energy Information Administration Wednesday indicated.

Total ULSD stocks declined 1.4 million barrels to 104.8 million barrels for the week ended April 15, but dropped 3.2 million barrels in the USGC to 38.9 million barrels, EIA reported. The week before, ULSD stocks fell 2.4 million barrels in the region.

Total ULSD production rose a slight 53,000 b/d to 3.57 million b/d, EIA said, with USGC output up 41,000 b/d to 1.94 million b/d. Production remained lower, however, than just a few weeks earlier in the traditional time that refiners come out of planned maintenance. Refinery runs rose in the US to 82.5% from 81.4% a week earlier, but fell in the USGC to 84.7% from 87.2%, EIA said.

"You hear nitpicky problems right and left, it seems like," one USGC trader said of USGC refineries.

He added that producers also may have found the discipline to keep run rates low despite favorable crack rates. "In years past, if there was money to be made, they've shot themselves in the foot and killed the market," he said.

On the demand side, traders said farming was a bright spot, bringing volume from the Gulf Coast to the Midwest. Trucking and commercial activity were said to be seasonally higher, the contango structure needed for storage buying is at breakeven, and exports are steady or better.

"All this talk that high flat prices [are] affecting demand has just been talk," the trader said. "It's not supported by the stats."

A second trader noted that total product supplied for distillates rose to 4.1 million b/d from 3.8 million b/d on a week-to-week basis, but believed a good portion of that rise is from cargo activity and not a larger US demand.

EIA "finally picked up the surge in exports in early April," he said. "Otherwise, it looked pretty consistent to me."

EIA also reported US stocks of low sulfur diesel dropped 553,000 barrels to 10 million barrels, heating oil dropped 567,000 barrels to 33.5 million barrels, and jet fuel declined 183,000 barrels to 41.2 million barrels.

Jet fuel production was stable nationwide at 1.41 million b/d, while LSD production rose 63,000 b/d to 230,000 b/d and heating oil slid 8,000 b/d to 358,000 b/d.

Product values were all heard unchanged in thin trading by noon, with ULSD heard done at NYMEX May heating oil plus 2 cents/gal in the Gulf Coast.

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