NEW YORK, Oct 8 (Reuters) - U.S. crude and gasoline
inventories showed a higher-than-expected increase in the week
to Oct. 3, according to weekly data from the U.S. Energy
Information Administration released on Wednesday.
Distillate stocks fell close to expectations. U.S. crude
oil prices tumbled after the release of the data. []
HIGHLIGHTS FROM EIA REPORT (In million barrels):
- Crude +8.1 (forecast +2.3)
- Distillate -0.5 (forecast -0.4)
- Gasoline +7.2 (forecast +1.1)
Click here for the EIA status report []
Click here for the API status report []
ANALYST COMMENTS
TIM EVANS, ENERGY ANALYST FOR CITI FUTURES PERSPECTIVE
"The big builds in crude and gasoline were the big
surprises in this week's data set, but the draw in distillate
stocks was smaller than expected as well."
PHIL FLYNN, ANALYST, ALARON TRADING, CHICAGO:
"Obviously, that's a big crude build. A lot of people were
hoping the refineries would be further along as far as the
runs, so people are a little disappointed there. I knew the
imports would be big, since this is all the back logged
supplies we lost over the last few weeks due to Ike coming in
in a big way."
"Obviously this is bearish, and right now we're in a
balancing act - should we focus on the tight supplies of
product or should we focus on the macro economics slowing
demand. I think we're going to continue to go back and forth
with that."
"Already the rate cut and the stock market seem to be
overshadowing everything. We definitely sold off after these
numbers came out, and now the inventory numbers are old news
and we're going to focus again on what the stock market does
for the rest of the day."
"Big picture, are we concerned about the tight supply?
We're nervous because we can't afford any other major
disruptions either weather-wise or geopolitically, but on the
other hand from the demand side of the equation it's still
pretty pathetic across the board.
Some of these demand numbers are storm-related and the
rebounding taking longer than thought, but a lot of it is just
good old fashioned demand destruction and people and businesses
reacting to these high prices and the credit crisis."
JIM RITTERBUSCH, PRESIDENT, RITTERBUSCH & ASSOCIATES,
GALENA, ILLINOIS
"The data looks bearish across the board, especially within
the gasoline and crude segments. Gasoline supply finally
showing the impact of strong import gains with crude imports
also stronger than expected. The larger-than-expected increase
in runs of 8.6 percent of capacity is also bearish and capable
of maintaining pressure on the crack spreads.
"The fact that crude supplies were able to build by more
than 8 million barrels in the face of the huge jump in runs is
also quite negative.
Cushing crude supplies leveled, but the overall jump in
crude cover should place some pressure on the WTI curve. The
distillate number looks slightly supportive but heating oil
will be pulled lower by the rest of the complex.
Demand numbers still exceptionally weak across the energy
spectrum. All in all, much lower prices are expected."
TOM BENTZ, BNP Paribas Commodity Futures Inc., New York
"Obviously, big build in the crude stocks, up 8 million, a
lot more than expected. Imports are up sharply, that's what led
to the crude stock build. It's kind of surprising because runs
are up so much.
"Gasoline stocks -- very big build there, I'm surprised at
how big of a build there was there as well. You've got refinery
margins for gasoline, in many cases, they are negative, so
there is no incentive to make gasoline...but demand is down
sharply as well, so I'm sure that's part of it."
MARK KELLSTROM, ANALYST, STRATEGIC ENERGY RESEARCH, SUMMIT,
NEW JERSEY
"Obviously inventories are recovering off the back of the
hurricane, and we're rebuilding lost barrels from the last
three weeks. It looks negative for the crude market but
inventory levels are still on the low side, and we would argue
that it's more than discounted in the price of crude oil.
The other thing to keep in mind, too, is that while some
might point to demand for the build in gasoline, there have
been pipeline related issues for getting the product to the
Southeast."
TOM KNIGHT, TRADER, TRUMAN ARNOLD, TEXARKANA, TEXAS:
"Although the magnitude of the stock builds in crude and
gasoline are sharply higher than expected, I find the latest
EIA data showing no particularly big surprise here. People have
been expecting a large increase in refinery runs as well. The
big gasoline stock build has been telegraphed by the cash
markets last week."
(New York Energy Desk, 646-223-6050)
