EIA analysis: US crude stocks tumble as refiners limit tax exposure

US crude stocks fell 7 million barrels the week ending December 27, data released Friday by the US Energy Information Administration showed. Crude stock draws this time of year are not uncommon, especially on the US Gulf Coast, where refiners typically run down inventories to limit their tax exposure. Refiners have lifted crude runs, in the process boosting production of distillates. As a result, US distillate stocks jumped 5 million barrels last week. You can see our analysis here.


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  1. Simon Jacques at January 4, 2014 9:38 pm

    “The reason for this sharp decline: December 31 is the typical assessment date for taxes on crude oil stocks that are collected by many states/counties/municipalities in regions where the bulk of U.S. crude oil and petroleum product inventories are stored,” the agency said.

    I admit that I don’t fully get it. Do they really create a loss only to lower their taxable basis, if so they will buy back inventories later (or swap the assets with someone ?).

    I am intrigued because if so they may sacrifice what could be a valuable basis position later.

    Simon

     

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