US refinery inputs
In its weekly report on September 23, the EIA (US Energy Information Administration) reported that US crude oil refinery inputs averaged 16.2 MMbpd (million barrels per day) during the week ending September 18. This was a decrease of 310,000 bpd (barrels per day) compared to the prior week’s average.
The decrease in refinery inputs caused the refinery utilization rate for the week of September 18 to fall to 90.9%. This was 2.2 percentage points less than the 93.1% utilization rate from the previous week.
Compared to last year, the current refinery input levels were unchanged. The four-week average refinery input levels for the week ending September 18 was also almost the same level as last year. However, the four-week average fell ~0.7% week-over-week. Looking at four-week averages gives you a broader view of what’s otherwise a volatile number week-over-week.
What this means
Usually, lower crude oil inputs indicate that the refining companies mentioned above, as well as refining MLPs such as Calumet Specialty Products Partners (CLMT) and CVR Refining (CVRR), are decreasing throughputs due to crude oil prices (USO), refined product prices, and seasonal environment.
MPC and VLO make up 5.5% of the Energy Select Sector SPDR ETF (XLE).
Refineries are the main source of crude oil demand. Refinery input levels affect crude oil inventory draws and builds. Refining throughputs affect inventory levels not only for crude oil but also for refined products such as gasoline and distillates. We’ll discuss the inventory levels for these products later in this series.