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EIA ANALYSIS: US oil demand drops sharply for week ended April 29

https://www.chemnet.com   May 06,2011 Platts
US oil demand fell an eye-popping 1.256 million b/d to 18.332 million b/d during the week ending April 29, with every product category declining except middle distillates, data from the US Energy Information Administration showed Wednesday.

Of the 1.256 million b/d decline, "other oils" or petrochemical feedstock accounted for about 75% of the drop.

At 18.332 million b/d, US oil demand was 1.135 million b/d below year-ago levels.

But on a four-week moving average, demand at 19.113 million b/d was 265,000 b/d above year-ago levels.

Gasoline demand continued to act as a drag on the total figure; demand on a four-week moving average of 9.084 million b/d was 178,000 b/d below year-ago levels.

The drop in implied demand fed into a 4.1-million-barrel build in US product stocks, causing them to rise to 674.555 million barrels. Despite the build, inventories are 3.839 million barrels below the five-year average and 47.567 million barrels below year-ago levels.

Within products, inventories of residual fuel oil, propane and propylene and "other oils" rose, while gasoline and middle distillate stocks declined.

Gasoline stocks dropped 1.046 million barrels to 204.542 million barrels, bringing the cumulative decline that has occurred over the past 11 weeks to 36.554 million barrels.

Gasoline stocks were 5.026 million barrels below the five-year average and 20.4 million barrels below year ago levels.

Gasoline stocks on the Atlantic Coast -- home of the NYMEX delivery point in New York Harbor -- declined 1.675 million barrels to 47.999 million barrels, the lowest level ever for the corresponding reporting week.

Stocks of middle distillates fell 1.398 million barrels to 145.132 million barrels with the entire drop concentrated in ULSD. Stocks of heating oil edged up 342,000 barrels to 33.151 million barrels, having lost demand for winter fuels. Closing out peak heating oil demand season above 30 million barrels should have bearish implications for the futures market.

At 145.132 million barrels, stocks of middle distillates were 17.543 million barrels above the five-year average, but 7.261 million barrels below year-ago levels.

While the headline products were falling, crude inventories continued a relentless climb. Crude stocks increased 3.421 million barrels to 366.546 million barrels last week, leaving inventories 16.638 million barrels above the five-year average and 5.971 million barrels above year-ago levels, with low refinery run rates feeding into the up trend.

By this point in the year, refiners would normally have boosted run rates -- and given fairly attractive margins -- should have done so already. Refinery utilization, however, languished at 82.8%, up just 0.1 percentage point.

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