Gasoline Stocks Plummet -- Platts, Rigzone

Updates

April 25, 2013, 7:26: CNBC will have a segment on rising oil prices. CEO of Gulf Oil: price for gasoline will continue to go down; winter grade to summer grade switch. Not a demand-led drop; clearing out winter-grade stock to make room for summer-grade stock. Demand is down 2%. Production is strong. Gasoline prices could go below $3/gallon by Labor Day. Industry looking for relief from Jones Act (adds 10 to 15 cents/gallon). Industry looking for relaxation on states' red tape hindering CNG and LNG stations. Administration's attitude toward the industry: fundamental dislike of oil and gas industry; fundamental lack of understanding of commodity trading. Keystone XL would eventually drop price of gasoline by about 30 cents/gallon.

Original Post

Rigzone is reporting:

Oil futures shot to their highest price in almost two weeks Wednesday, after a closely watched report said gasoline demand rose to its highest level in more than five months.

The weekly report from the Energy Information Administration also showed oil stockpiles last week rose less than expected, while gasoline inventories fell sharply.

"We're in positive territory" year over year, said Gareth Lewis-Davies, analyst at BNP Paribas. "This is not typical of what we've seen." 

Analysts expect gasoline demand to continue rising in the coming months as the summer driving season kicks in. That should trigger an increased need of crude oil from refiners. European refiners are also expected to exit a period of prolonged maintenance in the coming weeks that could contribute to demand.

No explanation how oil supplies rise, but gasoline supplies plummet.

Platts is reporting:

U.S. gasoline inventories plunged 3.93 million barrels during the week ended April 19 to 217.8 million barrels, the lowest level since the week ended December 7, according to data just released by the U.S. Energy Information Administration (EIA) Wednesday. Analysts polled by Platts on Monday had expected a 700,000-barrel decline in U.S. gasoline inventories.

The drop in inventories came amid a sharp jump in implied demand for the fuel, which rose 366,000 barrels per day (b/d) to 8.750 million b/d, even as production ticked upward by 93,000 b/d to 8.995 million b/d.

I've commented often on deltas between analysts' expectations/estimates and actual results, but this really defies ... I don't know what it defies, but it must defy something. A 700K decline is quite different than a 4 million-barrel decline. Wow.

Oil stocks increased; see linked article.

How does one explain increased oil stocks, but plummeting gasoline stocks? Wrong kind of oil (heavy vs light) in the pipeline for refineries.