U.S. crude oil stockpiles rose unexpectedly last week, while gasoline and distillate inventories also increased as refining ramped up and demand fell despite the kickoff of the summer driving season, the Energy Information Administration (EIA) said on Wednesday.
Crude inventories rose by 1.2 million barrels to 455.9 million barrels in the week ended May 31, the EIA said, compared with analysts’ expectations in a Reuters poll for a 2.3 million-barrel draw.
Crude oil futures edged higher after the data was released. By 11:21 a.m. EDT (1521 GMT), however, Brent was down 24 cents, or 0.3 per cent, at $77.27 a barrel while West Texas Intermediate crude (WTI) eased 23 cents, or 0.3 per cent, to $73.02.
Refinery crude runs rose by 61,000 barrels per day to 17.1 million bpd, their highest since December 2019, while refinery utilization rates rose by 1.1 percentage points to 95.4 per cent of total capacity, the strongest level in a year. Gulf Coast refinery utilization also hit its highest since June 2023.
“We haven’t run 17 million barrels a day through refineries since 2019,” said Bob Yawger, director of energy futures at Mizuho bank in New York. “They’re going to just swamp out the gasoline market if they keep doing this.”
Gasoline stocks rose by 2.1 million barrels in the week to 230.9 million barrels, the EIA said, slightly more than forecasts for a 2 million-barrel build.
Gasoline supplied, a proxy for demand, fell by 203,000 bpd last week to 8.9 million bpd.
“You have the demand number below 9 million (bpd) already in the week of Memorial Day weekend. That is pretty sad considering it was the holiday weekend. Back in the day, we would roll into 9 million in March,” Yawger said.
Distillate stockpiles, which include diesel and heating oil, rose by 3.2 million barrels in the week to 122.5 million barrels, versus expectations for a 2.5 million-barrel rise, the data showed.
Net U.S. crude imports rose last week by 13,000 bpd with imports of crude from Colombia climbing to highest since June 2020. Crude exports were up 276,000 bpd to 4.5 million bpd.
Crude stocks at the Cushing, Oklahoma, delivery hub for the U.S. benchmark rose by 854,000 barrels, the EIA said.