Weekly DOE Crude & Products Inventory Analysis - 12/1/2010

·         Crude inventories build vs expectations of draw –Crude oil inventories increased 1.1 mmbbls last week, compared with market expectations for a 2.0 mmbbls draw (per Bloomberg). Crude oil inventories are now sitting at 359.7 mmbbls, which are 5.8% above last year and 10.6% above the five-year average. It seems like supply/demand fundamentals have taken a back seat as crude was buoyed by Chinese economic data this morning that showed a large increase in factory orders, while numbers out of the Euro zone point to the fact that its manufacturing sector expanded at its fastest pace in 4 months in November. European Central Bank chief Jean-Claude Trichet also signalled officials may be willing to step up their response to the Euro zone debt crisis. In addition, US private sector jobs surged in November with the largest monthly increase in three years.

·         Gasoline inventories build vs expectations of draw –Gasoline inventories rose 0.6 mmbbls last week, compared with market expectations for a 1.3 mmbbls draw (per Bloomberg). Inventories of gasoline are now sitting at 210.2 mmbbls, which are 1.8% below last year and 3.4% above the five-year average.

·         Distillates draw below expectations –Inventories of distillates decreased 0.2 mmbbls last week, compared with market expectations for a 1.5 mmbbls draw (per Bloomberg). Distillate inventories are now sitting at 158.1 mmbbls, which are 4.6% below last year and 15.2% above the five-year average.

·         Refinery utilization decreases –Refinery utilization was down 2.9% last week to 82.6% and compares to utilization of 79.7% last year and the five-year average of 86.9%.