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Analysts look for 1.6-million-barrel build in crude stocks

https://www.chemnet.com   May 11,2011 Platts
Weekly oil data from the US Energy Information Administration and the American Petroleum Institute should show a build in US commercial crude stocks of about 1.6 million barrels for the reporting week ended May 9, analysts polled by Platts said Monday.

API is scheduled to release its weekly data at 4:30 p.m. EDT (2030 GMT) Tuesday; EIA's weekly oil statistics will be released at 10:30 a.m. EDT (1430 GMT) Wednesday.

A crude stock build would fit in with historic patterns for this time of year, and would continue a building trend that has been in place since early January. Since the week ending January 7, US crude stocks have climbed 33.434 million barrels to 366.546 million barrels, according to the EIA.

"Crude supplies are expected to show a small build due largely to a continued strong import pace that should more than offset increased demand from the refinery system," said independent analyst Jim Ritterbusch in a report.

The five-year average shows crude stocks climbing into early May before slipping into the summer months as refiners ramp up runs for peak driving season.

"Last week's EIA figures surprised on the upside in oil inventories due to a sharp falloff in total oil demand and because refinery utilization levels haven't recovered from the early-April decline," MF Global analyst Tom Pawlicki said in a report. "With those trends firmly in place, it is to be expected that another build in oil stocks will take place this week at the expense of products."

US refinery utilization was at an usually low 82.8% of capacity the week ending April 29; utilization was at 89.6% of capacity for the same week last year. Analysts were looking for utilization to climb 0.64 of a percentage point to 83.44%.

Gulf Coast utilization should recover as the 2.9-percentage-point drop to 83.2% for the week ending April 29 reflected temporary refinery outages stemming from a loss of power.

Atlantic Coast utilization at 66.8% of capacity was up 4.7 percentage points on the week, and should continue to climb.

"We look for East Coast runs to work higher toward 80% of capacity, a development that should begin to ease concerns over gasoline supply availability," Ritterbusch said. "Regardless, runs in total appear poised to remain appreciably below average levels for this time of year."

Analysts on average were looking for US gasoline stocks to fall 300,000 barrels and distillate stocks to rise 300,000 barrels.

A rise in utilization could boost production of gasoline, leading to a stock rise, but that could be balanced out if demand recovers from a big drop the week ending April 29.

Another gasoline stock draw would continue a trend that has been in place since early February. US gasoline stocks have fallen 36.554 million barrels since the week ending February 11 to 204.542 million barrels, according to the EIA.

Stocks are especially tight on the US Atlantic Coast, which has been bullish for NYMEX RBOB crack spreads as the RBOB contract is delivered in New York.

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