MOSCOW (MRC) -- US crude oil stockpiles jumped by nearly 14 million barrels last week while fuel inventories plunged, as production and refining output slowly came back online in the wake of the Texas winter storms, reported Reuters with reference to the Energy Information Administration's statement.
Crude inventories rose by 13.8 million barrels in the week to March 5 to 498.4 million barrels, compared with analysts’ expectations in a Reuters poll for an 816,000-barrel rise. Crude stocks dropped sharply in February after several days of freezing temperatures forced production to shut.
Refining activity rebounded as well, but with overall utilization rates lower than usual for this time of year, stocks of gasoline, heating oil and diesel continued to decline.
“Basically we’re still seeing the big impact from the storm,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “Crude production numbers are showing that number bounced up, so this could be a little bit of a headwind for prices because the production number is coming up faster than people thought.”
Oil prices rose modestly on the news. US crude gained 35 cents to USD64.38 a barrel while Brent was up 34 cents to $67.86 a barrel as of 10:42 a.m.
Refining processing jumped, with crude runs rose by 2.4 million barrels per day. Overall utilization rates rose by 13 percentage points, in the week, but that only brought overall capacity use to 69%, far below seasonal averages for this time of year.
Crude production rose to 10.9 million bpd, though the EIA weekly figures are based on models and less accurate than monthly figures.
“We are basically back to where we were on domestic production, which came back faster than refinery utilization,” said Robert Yawger, director of energy futures at Mizuho.
US gasoline stocks fell by 11.9 million barrels in the week to 231.6 million barrels, the EIA said, compared with expectations for a 3.5 million-barrel drop.
Distillate stockpiles, which include diesel and heating oil, fell by 5.5 million barrels versus expectations for a 3.5 million-barrel drop, the EIA data showed.
Net US crude imports fell last week by 919,000 bpd, EIA said.
As MRC informed before, the largest US refinery, Motiva Enterprises’ 607,000 barrel-per-day Port Arthur, Texas, plant, returned to normal operations. The refinery was shut on Feb. 15 when freezing temperatures, rarely seen on the US Gulf Coast, knocked out steam supply. Motiva began restarting the refinery on Feb. 24.
Motiva Chemicals has also resumed operations at its mixed-feed cracker in Port Arthur, USA. The process of restart of this cracker with the capacity of 635,000 mt/year of ethylene and 340,000 mt/year of propylene began on 27 February, 2021, and finished late last week. The cracker wa shut along with the refinery at the same site on 14 February, 2021, because of the deep freeze.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.