Big Inventory Boost Sends Crude Price Tumbling

Total gasoline inventories decreased by 2.9 million barrels last week and remain in the middle of the five-year average range. Total motor gasoline supplied averaged about 8.4 million barrels a day over the past four weeks — a rise of about 2.8% compared with the same period a year ago.

Distillate inventories decreased by 2.3 million barrels last week and are near the lower limit of the average range. Distillate product supplied averaged 3.8 million barrels a day over the past four weeks, up about 5.5% when compared with the same period last year. Distillate production totaled 4.3 million barrels a day last week, down about 100,000 barrels a day when compared with the prior week.

The American Petroleum Institute reported an inventory increase of 2.96 barrels in crude supplies last week, a decrease of 120,000 barrels in gasoline supplies and a drop of 1.6 million barrels in distillate supplies. Platts estimated a build of 2 million barrels in crude inventories for last week, and Bloomberg estimates called for a crude inventory build of 2 million barrels.

Crude prices were about down about 2.2% before the EIA report at $94.46 a barrel, and they quickly fell below $93 a barrel following the report. Crude prices are down sharply over the past several days, but gasoline prices continue to climb for reasons we spelled out in a look at refining this morning.

For the past week, crude imports averaged 7.7 million barrels a day, an increase of about 176,000 barrels a day from the previous week. Refineries were running at 82.9% of capacity, with daily input of 14.2 million barrels a day, about 134,000 barrels a day less than the previous week.

The United States Oil ETF (NYSEMKT: USO) is down about 1.9%, at $33.51 in a 52-week range of $29.02 to $42.30.

The United States Gasoline ETF (NYSEMKT: UGA) is down 0.9%, at $63.72 in a 52-week range of $45.13 to $65.86.