The polar vortex that brought sub-zero temperatures to much of the US also left its mark on the US EIA data for the week to 10 January. Implied all-products demand strengthened, up 0.6mmb/d (+3.5%) WoW to 18.9mmb/d and rising above the seasonal average (Figure 1). That was mainly brought on by a sharp rise in demand for distillates, which includes heating oil. Distillate demand jumped 0.7mmb/d (+23.2%) WoW to 3.7mmb/d, rising above the top of the seasonal range after last week’s record low. On the other hand, gasoline demand dropped 0.3mmb/d (-3.1%) WoW to 8.0mmb/d and is now close to the bottom of the seasonal range. On a 52-week average basis, all-products demand rose to 1.9% YoY, from 1.8% YoY in the previous week.
Refineries utilisation was hit by unplanned outages as a number of refineries struggled to cope with the freezing temperatures, even those in the Gulf Coast PADD 3 region. Utilisation levels dropped 2.3% WoW against market expectations of a 0.3% drop, while refinery throughput was down 0.4mmb/d (-2.5%) WoW to 15.7mmb/d.
Crude imports were sharply lower, down 1.1mmb/d (-13.5%) WoW to 6.9mmb/d, the third lowest since January 2000. That impacted crude inventory which dropped counter-seasonally 7.7mmbbl WoW, and more than ten times market expectations. Crude inventory levels are now markedly below the top of the seasonal range (Figure 2). Gasoline inventory levels are comfortable, having built 6.2mmbbl WoW, more than double market expectations, hitting the top of its seasonal range. Distillate inventory levels, however, are low. Distillate inventory surprised with a counter-seasonal 1.0mmbbl draw against expectations of a 1.2mmbbl stockbuild.
Domestic crude production rose 14kb/d (0.2%) WoW to 8,159kb/d. Production was also likely affected by the winter storm and though it is still early days in the year, the pace of production growth will have to pick up if the US is going to match the 8.5mmb/d (+1.0mmb/d YoY) average production the EIA has forecasted for 2014.
The US EIA data recorded a 7.7mmbbl draw in crude inventory (vs. -0.7mmbbl expected), a 1.0mmbbl draw in distillate inventory (vs. +1.2mmbbl expected) and a 6.2mmbbl build in gasoline inventory (vs. +2.5mmbbl expected).