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Refinery Maintenance Season Begins, Utilization Plummets

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The Energy Information Administration (EIA) released its weekly report today on the status of petroleum inventories in the United States. Here are some highlights:

CRUDE OIL INVENTORIES:
Crude oil inventories increased by 3.6 million barrels (MMbbl) to a total of 450.8 MMbbl. At 450.8 MMbbl, inventories are 28.7 MMbbl above last year (6.8%) and are roughly 6% above the five year average for this time of year. Inventories at the major delivery point in Cushing, OK fell 1.0 MMbbl to a total of 41.6 million barrels.

GASOLINE INVENTORIES:
Gasoline inventories increased by 0.4 million barrels (MMbbl) to a total of 258.3 MMbbl. At 258.3 MMbbl, inventories are up 9.2 MMbbl, or 3.7% higher than a year ago and are about 4% higher than the five-year average range for this time of year.

Here’s how individual regions and their gasoline inventory fared:
• East Coast (-1.8 MMbbl)
• Midwest (-3.2 MMbbl)
• Gulf Coast (+5.7 MMbbl)
• Rockies (+0.1 MMbbl)
• West Coast (-0.5 MMbbl)

It’s important to note which regions saw increases/decreases as this information likely drives prices up (in the case of falling inventories) or down (in the case of rising inventories).

DISTILLATE (DIESEL, HEATING OIL) INVENTORIES:
Distillate inventories increased by 1.2 million barrels to a total of 140.2 MMbbl. At 140.2 MMbbl, inventories are down 1.2 MMbbl, or 0.8% lower vs. a year ago. Distillate inventories now stand about 2% below the five-year average range for this time of year.

IMPLIED GASOLINE DEMAND:
Gasoline supplied to end users amounted to 8.65 million barrels per day (MMbpd), or 425,000 bpd lower than the previous week. So far in 2019, implied demand (“products supplied”) is 0.2% higher versus 2018, per the EIA.

REFINERY OUTPUT/UTILIZATION:
Refinery utilization decreased by 4.8% vs. last week’s numbers to reach 85.9%. Gasoline production decreased to 9.6 million barrels per day while distillate fuel production decreased to 4.8 million barrels per day last week.

Utilization rates for the last week were as follows:
• East Coast: 69.7% (-4.9%)
• Midwest: 84.2% (-8.7%)
• Gulf Coast: 88.5% (-2.4%)
• Rocky Mountain: 91.1% (-1.8%)
• West Coast: 85.5% (-6.3%)

These percentages show how much of a region’s overall capacity were used to refine oil. It’s important to note these percentages, because the lower the utilization percent, the lower output — which has a direct impact on local gasoline prices. If refiners in your region have low output, you’re more likely to see gas prices rise.

OVERALL SUPPLY:
Total oil stocks in the United States are up by 68.7 MMbbl (4.9%) versus a year ago and stand at 1.27 billion barrels (excluding the Strategic Petroleum Reserve).

IMPORTS/EXPORTS:
The U.S. imported 6.2 MMbpd of crude oil per day last week, down by 936,000 bpd vs. the previous week, while crude oil exports fell 506,000 bpd to 2,364,000 bpd. Total motor gasoline imports last week averaged 457,000 bpd. The U.S. also imported 438,000 bpd of distillate fuels. However, during the same time frame, the U.S. exported 959,000 bpd of finished gasoline and 1,265,000 bpd of distillates. In total, U.S. refineries exported 7.5 MMbpd of oil and petroleum products.

Before the report was released, the price of West Texas Intermediate crude oil was up 56 cents to $53.65 per barrel. Just after the report was released, oil was up $1.01.

Head of Petroleum Analysis (USA)

Patrick has developed into the leading source for reliable and accurate information on gas price hikes. Patrick has been interviewed as a gasoline price expert hundreds of times since 2004. Based in Chicago, Patrick brings to GasBuddy all his assets to help consumers by giving reliable and accurate price forecasts, including the San Jose Mercury News dubbing Patrick "one of the nation's most accurate forecasters" in 2012.