Companies Draw Down Gulf Crude Stocks To Limit Tax Liability
by: Andrew Schneider, February 20, 2013 3:02:00 am
The EIA’s preliminary data put end of year crude inventories for the region at 165 million barrels.
Hannah Bruel is a statistician with the agency. She says Gulf stocks usually drop sharply in December. That’s because the last day of the year is the typical assessment date for state and local taxes on both crude oil and petroleum product inventories.
“In almost all the instances for which we have data, with the exception of 1983, we’ve seen a decline in December, and no other month behaves that way.”
Crude inventories in the Gulf Coast have averaged a drop of 8 million barrels each December for more than 30 years. Bruel says the high price of oil over much of 2012 may have given companies a stronger incentive than usual to cut inventory and limit their tax exposure.
Because the drop in inventory happens with such regularity, Bruel says the market has already priced it in and that it is having no effect on the cost of gasoline.