RPT-Surprise pause in Cushing oil stock rise likely blip, not trend
(Repeats article that originally apeared on April 6, no changes to headline or text)
By Catherine Ngai
NEW YORK, April 6 (Reuters) - An unexpectedly tiny rise in crude oil stocks at Cushing, Oklahoma, last week was likely a one-off interruption in the unprecedented build in U.S. inventories, traders said, not a reversal.
On Monday, energy information group Genscape said its data showed Cushing stocks rose by only 169,000 barrels in the week to April 3. Oil futures jumped nearly $3 a barrel on surprise that the build was so much less than the average weekly build of 2 million barrels in recent months at the U.S. storage hub. Cushing last had a draw in the final week of November, and this was the smallest weekly build since then.
Oil futures jumped as market players saw a chance that a draw was looming at Cushing this week. But in the physical market, traders and other sources said they expected a large build. Citing industry reports of pipeline flows and refinery work, they said it looked like Cushing's hundreds of oil tanks remained on track to fill to the brim by the first week of May.
This week's Genscape report was "very bullish for crude," said one trading source. "But I think builds should be massive next week."
One factor that may help explain the small build was a dip in volumes on Tallgrass Energy Partners LP's Pony Express pipeline. But shipments have risen sharply since Wednesday afternoon.
This week, stocks may be inflated by the multi-day stoppage on both halves of the 850,000 bpd Seaway pipeline system from Cushing to the Gulf Coast. These were shut on April 3, the cut-off for the weekly stockpiles report by the U.S. Energy Information Administration, due on Wednesday.
Looking further ahead, Phillips 66 has scheduled up to two weeks of unexpected maintenance at its 247,000 bpd refinery in Sweeny, Texas. This will reduce local demand for Permian Basin crude that will now either be pumped to Cushing or shipped to Gulf Coast refiners. Continued...