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Stock Movements - Dec 12

Source: OPEC_RP121211 12/12/2012, Location: Europe

OECD
Preliminary data for October shows that total OECD commercial oil stocks fell by 12.3 mb to stand at 2,721 mb, after rising by more than 15 mb in September. The total stock-draw came from products, which declined by 17.2 mb, while crude rose by 4.9 mb. Despite the fall in total stocks, inventories stood at a comfortable level, with a surplus of 75.0 mb over a year ago and a gain of 38.0 mb compared to the five-year average. Nonetheless, within the components, tightness remained in products, which were 2.8 mb below last yearís level in the same period and 17.7 mb lower than the five-year average. Meanwhile, crude stocks showed a surplus of 78.3 mb with last year and of 55.3 mb with the seasonal norm.

On a regional basis, North Americaís stocks declined by 24.4 mb, with crude rising by 4.9 mb, while products abated this build, falling by 30.3 mb. The build in US commercial crude stocks reflected higher growth in light, tight oil supply in the USA, as well as higher imports from Canada. At 686 mb, North Americaís commercial crude oil stocks stood at comfortable levels, denoting a surplus with the five-year average of 55.2 mb, as well as being 78.3 mb more than a year ago. However, product stocks remained 30.0 mb below both the historical average and a year ago. Middle distillates in that region accounted for the bulk of the deficit, since higher exports were keeping stocks at lower levels.

OECD Europeís inventories saw a build of 10.5 mb, driven mainly by an increase of 10.0 mb in products, as crude rose by only 0.5 mb. With this total build, the regionís commercial stocks raised the y-o-y surplus to 35.3 mb in October from 14.3 mb a month earlier, while remaining 4.0 mb below the last five-year average. Both crude and products showed gains over a year ago at 15.2 mb and 20.0 mb respectively, while, when compared with the last five-year average, they saw an opposite picture, with crude stocks 12.7 mb below the seasonal norm and product stocks 8.7 mb above the seasonal average.

OECD Pacificís commercial stocks rose in October for the second consecutive month, by 1.6 mb, driven by an increase of 3.2 mb in products as crude abated this build and declined by 1.5 mb. The regionís commercial stocks stood at 15.9 mb above the last five-year average and were 26.3 mb higher than the same time a year ago. Within the components, commercial crude stood 12.8 mb above the historical average and 19.6 mb higher than the same period a year ago. Product stocks in the OECD Pacific at the end of October showed surpluses of 3.2 mb with the five-year average and 6.7 mb with a year earlier.

In terms of days of forward cover, OECD commercial stocks in October stood at 59.5 days, displaying gains of 2.4 days, compared with the last five-year average, and of 1.7 days, compared with the same period in the previous year. This comfortable level of days of forward cover for the OECD is not expected to fall, since demand in OECD countries is projected to decline further in the coming year during a continued good performance for non-OPEC supply. Indeed, OECD demand for next year is expected to fall by 200,000 b/d vis-ŗ-vis this year, while that of non-OPEC is forecast to increase by around 0.9 mb/d.

Europe
The latest available data for October shows that European stocks reversed the draw of the last month and experienced a strong contra-seasonal build of 10.5 mb to stand at 1,076.8 mb. At this level, they ended the month 30.2 mb or 2.9% higher than a year ago, but they were still 20 mb or 1.8% below the five-year average. The bulk of the build in total inventories came from products, which increased by 9.9 mb, while crude stocks rose by only 0.6 mb.

European crude inventories rose by 0.6 mb in October, reversing the drop of the previous month, and finished at 458.2 mb. At this level, they were 26.3 mb or 6.1% above the year before, although they were still 5.6 mb or 1.2% below the last five-year average. The build was attributed to the large drop in refinery runs. Indeed, autumn refinery maintenance cut European throughputs by almost 600,000 b/d in October to 10.5 mb/d, after three months of crude runs of above 11.0 mb/d. This corresponded to a utilization rate of 82.5%, down from 86.5% in the third quarter. However, reduced supply of Russian Urals from the Baltic, as well as the delay at the UKís Buzzard field, limited a further build in crude oil stocks.

Product stocks in Europe posted a significant build of nearly 10 mb to end October at 618.7 mb, the highest level since April. At this level, they were 3.9 mb or 0.6% above the same period last year, which was the first surplus since July 2010 when product stocks were above the year-ago level. However, when compared with the five-year average, European stocks remained 15 mb or 2.3% lower. Within products, all the components experienced builds, with the bulk coming from middle distillates which increased by 6.0 mb. At 382.5 mb, distillate stocks stood 8.5 mb or 2.3% above a year ago and 2.0 mb or 0.5% above the seasonal average. Continued weak demand in European counties, combined with higher diesel imports from the USA, was behind this build. However, a drop in refinery output limited a further build in distillate stocks.

Gasoline stocks rose by 1.4 mb to finish October at 108.3 mb, showing a surplus of 1.6 mb or 1.5% with a year ago, while they were 6.0 mb or 5.5 mb below the five-year average. Weakening gasoline fundamentals, following reduced demand in the region, as well as lower transatlantic exports, were behind the build in gasoline inventories. Fuel oil stocks rose for the third consecutive month, by 2.2 mb, to end October at 94.5 mb, which were 4.7 mb below the same period last year and 13.0 mb lower than the five-year average. This stockbuild was driven mainly by weaker bunker demand.

USA
US total commercial oil stocks fell in November for the second consecutive month, by 6.4 mb, to stand at 1,092.5 mb/d. Despite this stock-draw, they were 16.7 mb or 1.6% above the same period a year ago and 35.1 mb or 3.3% higher than the five-year average. The fall was attributed to both crude and products, which declined by 3.1 mb and 3.4 mb respectively.

In November, US commercial crude stocks reversed the build of the past two months and fell by 3.1 mb to stand at 371.8 mb. Despite this draw, they showed a surplus with a year ago of 34.1 mb or 10.1% and they were 42.5 mb or 12.6% above the five-year average. It should be noted that the bulk of the stock-draw in crude occurred during the week ending 30 November, when crude oil fell by 2.4 mb from the previous week, reflecting higher crude runs. On a monthly basis, the fall in US crude stocks came about from lower imports, which declined by 280,000 b/d to average 7.9 mb/d and were almost 800,000 b/d lower than in the same period last year. The increase of 240,000 tb/d in crude oil refinery inputs in November from the previous month also contributed to the drop in crude stocks. At 15.2 mb/d, US crude runs were also higher than during the same period a year ago, by more than 200,000 b/d. In November, US refineries operated at around 87%, which was 1.3 percentage points (pp) above the same month last year. In contrast with the draw on total crude commercial stocks, inventories in Cushing showed an increase of about 2.7 mb to stand at 45.6 mb, well above the same period last year.

Japan
In October, total commercial oil stocks in Japan increased for the second consecutive month, by 1.6 mb, to stand at 183.0 mb, the highest level since the end of December 2008. With this build, inventories widened the surplus with last year to 2.7% from 1.4% a month earlier, while remained around 1.9 mb or 1.1% above the five-year average. The total stock-build came solely from products, which increased by 3.1 mb, while crude declined by 1.5 mb.

Japanese commercial crude oil stocks declined by 1.5 mb, reversing the build of last month, and ended October at 102.6 mb. At this level, they were 1.6 mb above the same time a year ago and 3.6 mb above the seasonal average. The stock-draw came as crude imports decreased by more than 300,000 b/d or 8.5% from a month earlier. At 3.3 mb/d, Japanese crude imports were also 3.6% lower than a year ago at the same time. Lower crude throughputs limited a further draw in October. Indeed, crude throughputs fell by around 150,000 b/d or 4.5% to stand at 3.1 mb/d, and were 1.1% below the same period a year ago. Japanese refineries were running at 69.4%, which was 3.3 pp lower than in the previous month and 0.1 pp below the same period last year. Direct crude burning in power plants fell by 2.8% to end October at around 241,750 b/d, but they still showed an increase of 9.7% when compared with the same period last year.

Japanís total product inventories continued their upward trend, rising for the seventh consecutive month, by 3.1 mb, to end October at 80.3 mb, the highest level since December 2008. With this build, they switched the deficit of 2.2% of last month to a surplus of 4.0%. However, the deficit with the seasonal average remained at 2.0%. The build in total products came as total oil product sales in October fell for the first time in 11 months, as warmer temperatures curbed the demand for heating fuel. Within products, the bulk of the build came from distillates and naphtha, as other products remained almost unchanged. Distillate stocks continued their upward trend, increasing by 1.6 mb to end October at 37.5 mb, the highest level since November 2011. Despite this build, they still showed a deficit of 1.0 mb or 1.4%, compared with the five-year average, but they were 0.4 mb or 1.0% higher than the same period a year ago. Within the distillate components, all products saw a build. Kerosene stocks rose by 5.1%, reflecting lower domestic sales due to the unusually hot weather in October. Jet fuel inventories also rose by 2.2%, driven by a fall of 5.0% in domestic consumption, combined with a 23.4% decline in exports. Gasoil stocks increased by 4.5%, supported by a huge decline in exports and higher output.

Naphtha inventories saw an increase of 1.7 mb, ending October at 11.6 mb. At this level, they were 0.3 mb or 2.5% higher than a year ago, but still 0.9 mb or 7.3% lower than the five-year average. The build in naphtha stocks came from higher production, as this increased by 5.9%. Residual fuel oil stocks fell slightly, ending October at 17.1 mb and showing a surplus of 1.0 mb or 6% with a year ago; but they were 0.5 mb or 2.8% below the five-year average. Within the components of fuel oil, fuel oil A fell by 1.7%, while fuel oil B.C stocks remained almost unchanged. Lower production, combined with higher domestic sales, was behind the decline in fuel oil A inventories.

Gasoline stocks remained unchanged from the previous month and ended October at 14.1 mb. At this level, they were 1.5 mb or 11.9% higher than a year ago, representing a surplus of 1.1 mb or 8.7% with the seasonal average.

Singapore and Amsterdam-Rotterdam-Antwerp (ARA)
At the end of October, product stocks in Singapore rose for the second consecutive month, by 1.5 mb, and ended the month at 39.0 mb, the highest level since June. Despite this build, they were still 1.3 mb or 3.1% below the same time a year ago. Within products, middle distillate and fuel oil stocks saw builds, while light distillate experienced a draw. Light distillate stocks dropped by 1.0 mb to 9.2 mb, constituting a deficit of 2.0 mb or 17% with the same period last year. This stock-draw was mainly due to limited output, as most refineries were in a period of regular maintenance. This happened despite lower demand in the region. Middle distillate stocks rose by a slight 0.2 mb, reversing the draw of last month, and they ended October at 9.4 mb. This was 1.4 mb or 12.6% below the same time last year. On a weekly basis, middle distillate stocks reached more than 11.0 mb during the week ending 25 October, before falling to 9.4 mb by the end of the month, the lowest level for four weeks. This fall came from higher diesel demand from South Africa and Malaysia.

Fuel oil stocks surged for the second consecutive month, increasing by 2.3 mb and ending October at 20.5 mb. With this build, they switched the deficit with a year ago to a surplus of 2.1 mb or 11.4%. Stocks were expected to remain higher in November, as the Western arbitrage volume was expected to remain higher during the month.

Products stocks in ARA fell slightly by 0.2 mb in October flowing 2.6 mb decrease a month earlier, ending the month at 29.2 mb. At this level, they were 0.2 mb or 0.7% below the same time last year.

Within products, with the exception of fuel oil, all other products witnessed a draw, with the bulk of this coming from gasoil. Indeed, gasoil stocks fell by 1.0 mb to finish October at 15.0 mb, the lowest level for a year. Despite this drop, they were 0.7 mb or 5.2% higher than the same period a year ago. On a weekly basis, the week ending 31 October saw a build of nearly 1.0 mb over the previous week, boosted by higher inflows from the USA, France and the UK. Jet fuel inventories fell for the second consecutive month, by 0.4 mb, to stand at 2.6 mb, and this meant a decline of 1.9 mb or nearly 42.0% from the same period last year. Naphtha also saw a decline, of 0.3 mb, to stand at 0.6 mb, and was at almost at the same level as a year ago. This draw came on the back of higher demand from the petrochemical industry, which offset imports from Russia. Gasoline stocks fell by 0.4 mb in October to stand at 5.1 mb, unchanged from the same period a year ago. This decline occurred as higher exports outpaced arrivals to the ARA region. Fuel oil stocks were the only product showing a build, of 1.9 mb, and they ended October at 5.9 mb, the highest level since August 2011. At this level, they were 0.9 mb or 17.3% above the same period a year ago. This build was driven by higher arrivals to the region.



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