US DATA: API reports 10.6 million across-the-barrel stock build
Quantum Commodity Intelligence – US crude oil stocks posted a modest build for the week ending 12 January, while refined products also increased to complete an across-the-barrel stock build, according to a report released late Tuesday by the American Petroleum Institute.
The latest API numbers revealed a slim 483,000-barrel increase in crude inventories, although a sharp drawdown in stocks at Cushing avoided a larger build.
The key Cushing storage hub, the delivery point for the NYMEX WTI futures contract, posted a drop of almost 2 million barrels, breaking a run of steady increases. Cushing inventories had been steadily building since early November, reaching around 35 million barrels last week versus a nine-year low of 21 million barrels registered in October.
A steep fall in Cushing stocks is typically bullish for WTI futures, but the impact was countered by further large gains in the products sector, as gasoline inventories were up 4.86 million barrels, while distillates added 5.21 million barrels for an overall net oil build of 10.55 million barrels.
US oil production and refining capacity have both been hit by recent storms, which is likely to distort data during January, while the Arctic conditions are boosting demand for heating fuels but reducing driving miles.
Meanwhile, the 3-2-1 crack spread, a measure of US refining profitability against gasoline and heating oil margins, was around $24/b based on Feb24 futures contracts early Thursday, up around $1/b up on the week.
The weekly API report serves as a forerunner to the closely watched Energy Information Administration Weekly Petroleum Status Report, which will be published later Wednesday.
