Posted on 03/08/2006 9:53:00 AM PST by sully777
NEW YORK (Reuters) - U.S. commercial crude supplies shot to the highest level in nearly seven years last week on sluggish refinery use and high imports, the government said on Wednesday.
U.S. oil stocks jumped 6.8 million barrels in the week ended March 3 to 335.1 million barrels, or 10 percent higher than last year, according to the Energy Information Administration (EIA), the statistical arm of the Department of Energy.
"The crude build is huge," said Jason Schenker, an economist at Wachovia Bank in Charlotte, North Carolina.
Oil futures on the New York Mercantile Exchange fell more than $1.00 after the report to $60.55 a barrel. In May 1999, the last time supplies were as high, oil futures were less than $17 a barrel.
Refineries operated at 83 percent of capacity, down 2.2 percentage points on the week and a slump of 6.5 percentage points from the same time last year.
As a result of the low output, gasoline supplies fell for the first time in 10 weeks. Supplies of the motor fuel fell 1.1 million barrels to 224.8 million barrels.
But even with the slip, gasoline supplies remain above the upper end of the average range, according to the EIA. "Gasoline inventories are very well supplied going into the summer market," said Schenker.
And Kyle Cooper, analyst at Citigroup Global Markets, said supplies could soar when plants return. "After that you will see a flood of refined products," he said. Refiner maintenance is high this winter as many plants catch up with work that had been delayed by a wave of hurricanes last year.
At least three big coker units were set to restart in early March, including Exxon Mobil's coker at Baytown, Texas, and Valero's cokers in Corpus Christi, Texas and Aruba, according to a Reuters survey.
Distillate stocks, which include heating oil and truck diesel, fell 2.7 million barrels to 131.4 million barrels, but were still nearly 14 percent above last year.
Crude oil imports averaged 10.1 million barrels per day last week, up 267,000 bpd from the previous week, the EIA said.
Why do I pay 2.49/gal for regular?
I saw some guy say the other day that we have enough oil in the SPR to get us through the Iranian troubles.
Good summary, and sound advice. Personally, I think that there should be an overt hostile act before we offer any military assistance. Paid for in advance with cash and oil.
"Big Aluminum"
You have a good point about that. I don't see how speculation and trading per se can manipulate so large a market as oil.
Wow! Like I said, gas per gallon in my part of Washington State - $1.04 Friday, $2.29 Monday and $2.49 today! Same octane! Unbelievable!
As far as ME oil is concerned, the US imports something like 15% of its daily consumption. The Reserve would cover that for 90 days. The big question is what the world recovery curve would look like: would the rest of the world also have a 90 day cushion, and what would oil supply look like after 30 days, after 60 days, after 90 days. Japan and China would be in the deep spicy, but China could just forbid anyone to drive for the duration and could keep its electricity usage confined to coal only. I don't know what the situation is in India, there could be some problems. One thing for sure, the US Reserve would be held for military use first, so the civilians might not be able to run out to the store eight times a day for quite a while and public transportation is a joke. Europe would go on public transportation.
I have about 100 gallons of gasoline set aside for hurricanes, Bird Flu pandemic, war with Iran and etc. I could probably stretch that for months. I know other people who have extra supplies of gasoline...in fact, some of our recent high prices may be a result of hoarding. A lot of people in this region got 'burned' for lack of fuel when Katrina came through and aren't going to let that happen again. We (the US) are probably sitting on more 'reserves' than is on the books.
The 16 gallons of gasoline in my SUV will last about a year. Only reason I go anywhere is I have a P O Box and have to pick up a couple bills a month. If I put them on autopay, I wouldn't have much excuse to go anywhere at all. I am finding it harder to justify going to the supermarket even every two weeks now. If municipal power also goes out I will be back where I was 20 years ago when we finally got power.
GMTA
Ours just went up a nickel today.
Where are all the peak oilers (or, are they simply crass small time speculators trying to drive panic?) who were saying 100 per barrel by April? Mighty quiet around here ....
Very interesting
Well, duh. It's a La Niña year. Mild winter. My royalties follow by about two months - so I have to store up any money I have to get through the next two months, when I'll starve, otherwise, thanks to the lower nat gas demand.
Next year--maybe El Niño, maybe not. Whatever we lose in oil & gas profits this year, we'll make up the next. Whatever reserves are stored up will be drawn down sooner than you think. Feast or famine is the nature of the beast.
Which is why the temptation to just sit on the oil stocks is so big. Funny thing is, eventually you run out of storage and have to start selling. Should make a very volatile market.
Yet they'll cook up a bravo sierra story this summer to tell us when the "summer driving season" bumps the price of a gallon of gas up to $2.50-2.75 . . .
Buy stock now, sell later.
Curious: the one consistent loser in my portfolio is XOM!
Try COP. I'm thinking of adding a few shares today so I'm hoping it will drop like it has over the past couple of days.
What do you think of ERHE? Too risky?
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