Crude oil inventory rose +2.8 mmb, compared with consensus of +2 mmb increase, to 338.4 mmb in the week ended September 29. The good thing is Cushing stock recorded significant drop of -1.5 mmb.
Situation in oil product stockpiles was better than previously anticipated. Gasoline inventory drew -1.66 mmb while distillate inventory gained only +0.32 mmb. Both readings beat market expectations.
WTI crude oil price changes little after the report, only edging slightly higher to 67.5 from 66.5 before the release. Investors probably need to gauge the implications of a higher crude build with lower distillate build.
Heating oil bounces to 1.71 while RBOB gasoline rises to 1.65 after the report.
Lack of positive response from investors was also driven by disappointing US employment data and Chicago PMI. ADP reported -254K decline in employment in September following a -277K drop in the prior month. The market had expected a decline of only -195K. Chicago PMI slid to 46.1 in September after reaching the expansionary territory of 50 a month ago.
US Oil Inventory
| Weekly change in inventory as of 25/09/09 | Actual | Change | Market Expectation | Previous |
| Crude oil | 338.4 mmb | +2.80 mmb | +2.00 mmb | +2.86 mmb |
| Gasoline | 211.5 mmb | -1.66 mmb | +1.00 mmb | +5.41 mmb |
| Distillate | 171.1 mmb | +0.32 mmb | +1.20 mmb | +2.96 mmb |
Comparison between API and EIA reports:
API (Sep 25) | EIA (Sep 25) | |||||
Actual | Inventory | Previous | Forecast (using API’s inventory level) | Inventory | ||
Crude oil | +2.76 mmb | 340.0 mmb | +0.28 mmb | +4.39 mmb | 340 mmb | |
Gasoline | -1.72 mmb | 212.5 mmb | +3.82 mmb | -0.11 mmb | 213 mmb | |
Distillate | +2.29 mmb | 170.7 mmb | -1.88 mmb | -0.05 mmb | 171 mmb |
API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department (EIA)for its weekly survey. Oil inventories from the API and EIA moved in the same direction for over 70% of the time, using data in the past 4 years.
Source: Bloomberg, API, EIA