U.S. crude stocks rose unexpectedly last week, while gasoline and distillate inventories fell more than expected, as refining activity slowed in the world’s top oil producing country, the Energy Information Administration said on Wednesday.
Crude inventories swelled for a second straight week, rising by 3.2 million barrels to 451.4 million barrels in the week to March 29, the EIA said, compared with analysts’ expectations in a Reuters poll for a 1.5 million-barrel draw.
U.S. gasoline stocks, meanwhile, fell by 4.3 million barrels in the week to 227.8 million barrels, the EIA said, compared with analysts’ expectations in a Reuters poll for a 800,000-barrel draw.
“With refinery utilization increases continuing to struggle, crude inventories have built over the last few weeks awaiting refineries to return to service,” said Andrew Lipow, president of Lipow Oil Associations.
U.S. refiners have reported several major outages this year, with some caused by unplanned electrical issues, fires and winter weather, and others that were planned for maintenance.
Refinery crude runs fell by 35,000 barrels per day last week, while refiners’ utilization rates shed 0.1 per cent in the week to 88.6 per cent.
Those rates are expected to jump as refiners complete maintenance and gear up to meet the needs of more drivers hitting the roads starting in late May.
“We will be looking at that up toward probably 94-95 per cent by the time the summer driving season arrives,” said Tim Evans, an independent energy analyst, referring to refinery utilization rates.
Distillate stockpiles, which include diesel and heating oil also fell as refining slumped and warmer spring weather arrived in parts of the country, with a drop of about 1.3 million barrels in the week to 116.1 million barrels, versus expectations for a roughly 600,000-barrel drop, the EIA data showed.
Oil futures pared gains immediately after the report, with Brent futures trading 85 cents higher at $89.77 a barrel by 10:38 a.m. ET (1437 GMT). WTI futures were up 77 cents at $85.92 a barrel. Both Brent and WTI futures had gained over $1 a barrel ahead of the EIA data.
U.S. crude imports, which edged up last week by 75,000 barrels per day, according to the EIA, also contributed to the crude oil build.