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Stock Movements - Apr 07

Source: OPEC_RP070412 4/16/2007, Location: Europe

US total commercial oil stocks fell 4.8 mb or 0.5% to stand at 982 mb at end-March. This corresponded to 2.3% below the same period of the previous year but 3% above the five-ye araverage.

Crude oil stocks rose 8 mb or 0.26 mb/d to 333 mb, down 3% from a year earlier but remained 6% above the five-year average. In contrast, product stocks fell 13 mb to 650 mb, the lowest level since mid-2004. The drop in product stocks was driven essentially by gasoline inventories, which declined for the eighth consecutive week to stand at 205 mb, 15 mb below the previous month and 4% down from a year earlier. Gasoline stocks dropped during the last week of March falling 5.0 mb to stand below the five-year average for the first time this year.The continuous build in crude oil stocks and a draw on product inventories can be attributed essentially to lower refining throughput resulting from seasonal refining maintenance and unexpected supply disruptions from unplanned refinery outages which took place in several refineries in the USA during February and March. In addition, lower imports and healthy demand for gasoline have contributed to the drop in gasoline stocks. The refinery utilization rate in the USA averaged less than 87% in March compared with around 90% in the corresponding month of previous years, although 2006 was an exception due to hurricane damage to the refining infrastructure.

On the import side, crude oil imports increased to 10 mb/d in March, compared with 9.8 mb/d a year earlier and less than 9.5 mb/d in the previous month. This led to growing stocks, which was reflected in Cushing, Oklahoma, where stocks were near full capacity. In contrast, gasoline imports were below their year-earlier level. On the demand side, gasoline consumption has remained healthy so far this year, 1.7% higher than a year earlier according to preliminary estimates. Distillate stocks, essentially heating oil, also dropped 5.4 mb, to 118 mb, due to strong demand supported by cold weather in the Northeast. Nevertheless, despite this decline, distillate stocks remained 7% above the five-year average. In contrast, jet fuel and residual fuel oil stocks increased by 3.1 mb and 0.1 mb respectively to stand at around 40 mb each.

The latest data show that US crude oil stocks rose 0.7 mb to stand at 333.4 mb in the week ending 6 April. At this level, US crude oil stocks showed a surplus of 21 mb or 7% against the five-year average. The abundance of crude oil stocks was the result of continuously lower refining throughput. In contrast to crude oil, gasoline stocks dropped a hefty 5.5 mb to settle below 200 mb. With nine consecutive declines, US gasoline stocks went 3% below the five year average. Gasoline stocks have declined 27.5 mb over the previous nine weeks. It is worth noting that in the week ending 6 April, crude oil stocks reached their highest level since the beginning of December, while gasoline stocks hit their lowest level over the same period. Distillate inventories reversed the downward trend displayed during the previous ten weeks with an increase of 0.2 mb to 118 mb, which represented a surplus of 9% against the five-year average. The recovery in distillate stocks was attributed to diesel oil which rose almost 5 mb while heating oil fell 4 mb.

Total US commercial oil stocks remained stable at 982 mb compared with the previous week, but were 3% above the five-year average.

Western Europe
Total commercial oil stocks in EU-16 (Eur-15 plus Norway) fell to 1,152 mb at end-March, down 7.7 mb from the previous month but remained 10 mb above the year-ago level. The drop was driven essentially by crude oil which fell by 4.9 mb, offsetting the build in the previous month. At 473 mb, crude oil stocks displayed a deficit of more than 21 mb or 4% against a year earlier, while product stocks dropped 2.8 mb to around 680 mb, but were up 30 mb compared with the same time last year. The draw on crude oil stocks was attributed to lower imports, particularly from the Middle East. In contrast, gasoline inventories in EU-16 increased 0.4 mb to 139 mb, which was 1.8 mb lower than last year as a result of the combination of lower refinery throughput and healthy exports to West Africa.

The continuous drop in refining throughput, which resulted in a utilization rate of 88.5% compared with 93% in the previous month, pushed middle distillate stocks below 400 mb, down 3 mb from the previous month but a surplus of 25 mb over a year ago. The drop in refinery runs was exacerbated by an 18-day strike in the South of France, which forced several refineries in the region to reduce output. Residual fuel oil inventories fell 0.2 mb to 113 mb, which was 7 mb above the year-ago level while naphtha stocks remained unchanged at 29 mb.

Japan
Japanese commercial oil stocks dropped almost 15 mb or 7% to stand at nearly 186 mb at the end of February. Products accounted for 8.7 mb or 60% of the drop and crude oil accounted for the remaining 6.1 mb. Despite this decline, products remained 6 mb higher than a year earlier and 17 mb or 26% above the five-year average.

Crude oil stocks continued to decline for the fourth consecutive month to stand at 104 mb, the lowest level since March 2006 but showed a surplus of 5% above a year earlier.

All product inventories declined except naphtha. The drop was driven essentially by distillates, which fell 8.4 mb or 19% to 36 mb, the lowest level since August 2006. Gasoline and residual fuel stocks fell 0.8 mb and 0.9 mb to stand at 14.3 mb and 20.0 mb respectively, while naphtha rose 1.4 mb or 14% to 11.3 mb. Compared with the previous year, all product stocks were higher, except naphtha, which showed a deficit of 0.4 mb or 3%. The drop in product stocks with a refining utilization rate of 90%, coupled with weak demand, can be explained by exceptionally strong exports, helped by arbitrage opportunities. However, product exports surged 63% while imports slipped 20% compared to February 2006.

Preliminary data from PAJ showed that crude oil stocks recovered in March, ending the month at 109 mb, while product stocks, especially middle distillates, dropped, resulting in total oil stocks of 187 mb due to the lower refinery utilization rate following the start of seasonal maintenance.

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