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US Crude Stocks- Down 3.438 MB (Cushing Stocks – Down 0.832 at 28.273 MB)
US Gasoline Stocks- Up 3.717 MB
US Distillate Stocks- Up 0.438 MB
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*EIA: US Total Working Gas In Storage -87 Bcf At 3290 Bcf
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US Crude Stocks- Down 4.809 MB —- Cushing Stocks Down 0.819 MB at 28.265 MB
US Gasoline Stocks- Up 4.309 MB
US Distillate Stocks- Down 0.9 MB
For the week ending January 13 the latest Platts survey is looking for a 2.6 million barrel build in crude oil stocks, a 1.4 million barrel rise in distillate supplies, and a 3.0 million barrel gain in gasoline inventories. Looking first at crude oil, right or wrong we would look for a retracement in imports from the prior week’s above-trend rate, and steady runs. With domestic crude oil production continuing to average modestly below 5.9 MMB/D, our arithmetic would suggest a gain in stocks smaller than consensus expectations.
*EIA: US Total Working Gas In Storage -95 Bcf At 3377 Bcf
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–Analysts expect 89 Bcf draw on inventories
| –Double-digit draw would be lower than year ago, five-year averages |
| –Would leave inventories 17% higher than five-year average |
| By Christian Berthelsen |
| Of DOW JONES NEWSWIRES |
| Analysts and traders expect government data scheduled for release Thursday to show a smaller-than-average draw in natural-gas inventories as warm weather undercuts the peak heating season in key areas of the U.S. |
| The U.S. Energy Information Administration is expected to report that 88.8 billion cubic feet of natural gas were withdrawn from storage during the week ended Jan. 6, according to the average prediction of 18 analysts and traders in a Dow Jones Newswires survey. |
| The EIA is scheduled to release its storage data Thursday at 10:30 a.m. EST. |
| The survey’s median result was a draw of 88.5 billion cubic feet, with a high estimate of a 101-bcf draw and a low of a 72-bcf draw. The withdrawal estimate falls short of last year’s 137-bcf draw in storage for the same week and the 128-bcf five-year average draw for that week. |
| If the storage estimate is correct, inventories as of Jan. 6 will total 3.383 trillion cubic feet, about 17.2% above the five-year average and 13.6% higher than last year’s level for the same week. |
| Warmer-than-normal temperatures have driven withdrawals to come in below average throughout the autumn and winter. Though there was a cold snap last week, overall temperatures have continued to be above normal in most areas of the country, including the northeastern areas that are key markets for gas-fired heating demand. |
Late yesterday the API reported that for the week ending January 6, U.S. crude oil stocks rose 397,000 barrels to 334.875 million barrels in contrast to market expectations of a draw. The “arithmetic” implied a larger build, but part of discrepancy was due to the tabulation of Alaskan crude in transit, which can also impact the DOE data. With regard to refined products, the API reported that distillate fuel oil stocks rose by 846,000 barrels to 146.249 million barrels, while gasoline supplies increased by 1.892 million barrels to 220.987 million barrels. As previously discussed, we would look for the DOE data to be somewhat more constructive than consensus expectations, but we shall see.
Platts survey is looking for a 1.0 million barrel decline in crude oil stocks for the week ending January 6, a 1.35 million barrel rise in distillate supplies, and a 1.75 million barrel increase in gasoline inventories. In terms of crude oil, we had mentioned last week that stocks rose contrary to the mean of historical experience for the last reporting period of the year, but that technically there was one day left in 2011 when a tax-related draw on the Gulf Coast may have occurred. We will assume so, and as such our guesstimates would yield a decline in crude stocks last week exceeding consensus expectations. For refined products, we believe the odds should heavily favor a recovery in implied distillate demand such that the latest four-week average reverts back to our mean given our estimate of manufacturing activity. Assuming a slight decline in supply, we believe stocks fell slightly last week, contrary to what the market expects. For gasoline, we believe implied demand also recovered last week, though less so than distillate, and with a decline in imports we would estimate a draw in gasoline stocks. Thus, if our assessment is anywhere close, the market will likely wish to build on gains over the extreme short term, but then progressively respond to the recovery in crude stocks that should characterize the first quarter.
Hornsby Trading News
- Platts Energy Inventory Survey Plus Hornsby & Company Inventory Assessment – February 7th.
- US NATURAL GAS INVENTORY SURVEY: Draw Of 126 Bcf Expected – Dow Jones
- Weekly DOE Inventory Report – February 1st.
- API Inventory Report – January 31st.
- Platts Energy Inventory Survey Plus Hornsby & Company Inventory Assessment – January 31st.