NEW YORK, Sept 24 (Reuters) - U.S. refined fuel stockpiles
fell by more than expected last week as refinery utilization
dropped to the lowest on record in the wake of Hurricane Ike,
according to a U.S. government report on Wednesday.
Crude stocks, meanwhile, dipped by less than expected
thanks to the lower demand from refineries.
HIGHLIGHTS FROM EIA REPORT (In million barrels):
- Crude -1.5 (forecast -2.0)
- Distillate -4.2 (forecast -1.5)
- Gasoline -5.9 (forecast -4.0)
Click here for the EIA status report []
Click here for the API status report []
ANALYST COMMENTS
ROB KURZATKOWSKI, ANALYST, OPTIONSXPRESS, CHICAGO:
"The refinery runs were surprising, much lower than we were
expecting. I don't think the smaller drawdown in crude
inventories was as bullish as traders expected.
"But the larger drawdown in gasoline underscores product
supplies should stay tight, especially in the Southern states.
We've already seen severe shortages in places like Tennessee.
"We've been much slower on the recovery than expected. Once
we do start bringing back up refining, we may see a squeeze on
crude supplies down the road. Even if we ramp up imports.
"Because the report is essentially neutralizing itself,
overall it's not that bullish."
KYLE COOPER, DIRECTOR OF RESEARCH, IAF ADVISORS, HOUSTON,
TEXAS:
"The EIA data shows you that demand looks abysmal. The
crude import numbers are surprising. Going forward, I see
inventories rising."
PHIL FLYNN, ANALYST, ALARON TRADING, CHICAGO:
"Just on the headlines off the top, it wasn't as bad as the
market was looking for. We were really nervous going into this
report that the numbers would be down, and I don't want to
paint a picture that these are good numbers, but they're not as
bad as the market had feared, especially when it comes to the
crude oil supply."
"Imports were as expected. Most of the numbers were in line
with expectations or not that far off. With the squeeze play
that we had in the last week the rumor mill was running saying
'maybe there's a real supply problem out there' and we really
had to brace for these numbers."
"We were bracing for the worst and we just got bad, kind of
a replaying of the hurricane fears where we were bracing for
the worst and we just got bad."
"The gasoline demand really reflects what's going on as
well. We're balancing the supply versus the demand destruction
from the hurricanes."
CHRIS JARVIS, SENIOR ANALYST, CAPROCK RISK MANAGEMENT, NEW
HAMPSHIRE:
"The impact of Hurricane Ike was in full force in this
week's EIA data, as supplies across the board dropped rather
sharply, a trend that should continue over the coming weeks
sending gasoline stocks to dangerously low levels. Demand has
weakened further as price spikes in the cash market put some
end users on the sidelines. In short, numbers are bullish even
with demand coming off a bit more than expected."
AMANDA KURZENDOERFER, ANALYST, SUMMIT ENERGY, LOUISVILLE, KY:
"The refinery utilization is even lower than after Katrina
and Rita. Ike has not been seen as big an event or gotten as
much attention, proving that there is lot of lasting damage to
be had."
JIM RITTERBUSCH, PRESIDENT, RITTERBUSCH & ASSOCIATES, GALENA,
ILLINOIS:
"Main feature in the report in our view was the huge cut in
refinery activity of almost 11 percent of capacity that dropped
activity a full 20 percent below levels that existed at the end
of August.
"Obviously, last week's limited refinery restart process
didn't show up in the numbers and this contributed to much
lower product stock levels than we had anticipated. Crude
stocks also fell below our ideas but the 1.5 million barrel
draw in crude supply is somewhat at odds with the plunge in
refinery activity.
"The market's tepid response to the figures thus far
suggests a likely sharp reversal in these figures next week.
Overall, main impact may fall on the gas cracks that are
showing some firming following the data release."
TOM BENTZ, ANALYST, BNP PARIBAS COMMODITY FUTURES INC, NEW
YORK:
"The US refinery utilization is down 10.7 percent, but it
seems the numbers are delayed. Since last week alot of
refineries have started to return after the hurricanes."
(New York Energy Desk, 646-223-6050)
