Analysis: EIA Reports Surging Crude Oil Inventories


   
Karim Bastati
DTN Analyst

   U.S. commercial crude oil inventories surged by 7.1 million barrels to 426 
million bbls last week, narrowing the gap to the seasonal five-year average to 
8%. The sizable build followed five consecutive weekly draws in which stocks 
fell to an 11-year seasonal low, Energy Information Administration data 
revealed Wednesday.

   The surge in crude oil inventories came despite a 1.358 million bpd 
week-on-week decline in reported net imports, while estimated crude oil 
throughput softened by only 98,000 bpd. To account for the imbalance, 
yesterday's report included a 1.771 million bpd swing in the adjustment factor, 
from 984,000 bpd unaccounted for demand in the last week of June to 788,000 bpd 
unaccounted for supply in the first week of July.

   Another reported draw to distillate fuel oil inventories, meanwhile, widened 
the gap to the five-year average to 23%. An 800,000-bpd decline in the week 
ending July 4 left stocks at 102.8 million bbls, down 17.5% year-on-year. 
Distillate fuel oil demand has consistently outperformed year-ago levels, with 
the four-week average product supplied up 140,000 bpd year-on-year.




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