New York—US gasoline inventories saw a counter-seasonal build in the week ended March 12 as imports pushed to seven-month highs, US Energy Information Administration data showed March 17.
Total gasoline stocks edged 470,000 barrels higher to 232.08 million barrels last week leaving stocks 5% behind the five-year average, in from a deficit of 6.4% the week prior.The build comes as imports surged to 910,000 b/d, up 58% on the week and the strongest since the week-ended Aug. 7. The bulk of these imports -- 710,000 b/d -- landed on the high-demand US Atlantic Coast, which is structurally short of gasoline.
NYMEX April RBOB settled 5.41 cents lower March 17 at $2.0471/gal and April ULSD declined 2.66 cents to $1.9061/gal.
But this import surge failed to prevent a draw down in USAC gasoline stocks, which declined 620,000 barrels to 63.07 million barrels. Instead the nationwide inventory build was concentrated on the US Gulf Coast and in the Midwest, which saw counter-seasonal increases of 770,000 barrels and 750,000 barrels, respectively.
Total refinery net crude inputs were up 9% from the week prior at 13.43 million b/d as utilization jumped 7.1 percentage points to 76.1% of total capacity. Notably, at these levels crude inputs were still 9% behind where they were the week prior to the February deep freeze and utilization was still 7 percentage points below pre-storm levels.
Still, this recovery in refinery runs pushed gasoline production up 440,000 b/d to 9.12 million b/d, an 18-week high.
But the surge in USAC gasoline imports depressed regional prices to the point that these USGC and Midwest barrels were left stranded amid closed pipeline arbitrages.
Colonial Pipeline Line 1 runs from the Houston area to Greensboro, North Carolina, and has a capacity of 1.5 million b/d of gasoline. Once the barrels arrive there, they are put into Line 3, which runs from Greensboro to Linden, New Jersey. At this point, the barrels need to be competitive compared to the Buckeye Pipeline product and the New York Harbor barges; otherwise they will not reach Linden.
Prompt New York Harbor RBOB barge cargoes were assessed last week at an average discount of more than 10 cents/gal to NYMEX front-month April RBOB futures, S&P Global Platts data shows, whereas RBOB assessed at the Linden Colonial pipeline terminal averaged a 2 cent/gal premium to the NYMEX contract over the same period.
Furthermore, lingering refinery issues resulting from the February deep freeze has led to delays on deliveries along the East Coast, further backing up USGC and Midwest storages.
Crude stocks higherUS crude stocks continued their march higher last week as refinery demand remain blunted by lingering storm outages.
Commercial crude stocks climbed 2.4 million barrels last week to 500.8 million barrels. The counter-seasonal build pushed inventories nearly 7% above the five-year average, opening the widest surplus since the week ended Jan. 15.
NYMEX April WTI settled down 20 cents at $64.60/b and ICE May Brent declined 39 cents to $68.00/b.
USGC stocks surged 5.26 million barrels to 288.18 million barrels as regional refinery runs languished 15.8 percentage points behind pre-storm levels. The USGC build was exacerbated by a 110,000 b/d slowdown in exports to 2.52 million b/d.
The USGC build was offset by a 1.62 million-barrel decline in Midwest crude stocks, including 620,000-barrel draw in inventories at the NYMEX delivery point of Cushing, Oklahoma. West Coast stocks also saw a 1.51 million-barrel draw as regional refinery utilization, which was unaffected by the Texas freeze, climbed 1.2 percentage points to 78.5% of utilization, the highest since the week ended March 20, 2020.
