Refinery Activity Could Thwart Rising Gas Prices

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The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning. U.S. commercial crude inventories increased by 3.5 million barrels last week, maintaining a total U.S. commercial crude inventory to 397.7 million barrels, and they sit well above the upper limit of the five-year range for this time of the year.

Total gasoline inventories decreased by 300,000 barrels last week and are now in the lower half of the five-year average range. Total motor gasoline supplied (the EIA’s measure of consumption) averaged more than 8.7 million barrels a day over the past four weeks, up about 1.8% from the same period a year ago.

Distillate inventories rose by 600,000 barrels last week and remain below the lower limit of the average range. Distillate product supplied averaged more than 3.9 million barrels a day over the past four weeks, up by 5.2% when compared with the same period last year. Distillate production averaged 5 million barrels a day last week, about 100,000 barrels a day more than the prior week’s production.

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Tuesday evening, the American Petroleum Institute (API) reported that crude inventories rose by 519,000 barrels in the week ending April 18, together with a decline of 3.4 million barrels in gasoline supplies and a rise of 570,000 barrels in distillate supplies. For the same period, Platts estimated a rise of 3.1 million barrels in crude inventories, a decline of 1.7 million barrels in gasoline inventories and a drop of 900,000 barrels in distillate inventories.

West Texas Intermediate WTI crude prices closed at $101.75 on Tuesday and were trading about flat before the EIA report at around $101.85 a barrel. The WTI price slipped to around $101.60 shortly after the report was released.

For the past week, crude imports averaged 7.8 million barrels a day, down about 125,000 barrels a day from the previous week. Refineries were running at 91% of capacity, with daily input of 16 million barrels a day, up 376,000 barrels over the previous week’s average.

Imports fell last week as the impact of the spill in the Houston Ship Channel was finally put behind us. Refinery runs are increasing again as maintenance and turnarounds are completed. One exception is California, where refinery issues have cut into gasoline inventories and caused prices to jump $0.25 a gallon in the last month, according to GasBuddy.

According to AAA, the currents national average pump price per gallon of regular gasoline is $3.673, up from $3.653 a week ago and $3.529 a month ago. Last year a gallon of regular cost $3.515 on average in the U.S. Gasoline prices continue to rise this year compared with last year when they had begun falling by this time.

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Here is a look at how share prices at three U.S. producers are reacting to the new report.

Exxon Mobil Corp. (NYSE: XOM) traded up about 0.3%, at $100.71 in a 52-week range of $84.79 to $101.74.

Chevron Corp. (NYSE: CVX) traded up 0.7%, at $124.86 in a 52-week range of $109.27 to $127.83.

Continental Resources Inc. (NYSE: CLR) traded up about 0.4% to $135.74, after posting a new 52-week high Wednesday morning of $137.29. The 52-week low is $76.31. The company has posted four new 52-week highs in the past five trading days, and shares are up 78% in the past 12 months. Continental is the largest producer in the Bakken shale play.