Update: U.S. crude oil inventories rise as refining activity dips
U.S. crude oil inventories rose last week as refinery utilization rates fell amid weakening fuel demand, data from the U.S. Energy Information Administration (EIA) showed.
Crude inventories rose by 3.9 MMbbl to 417 MMbbl in the week ended Sept. 27, the EIA said, compared with analysts' expectations in a Reuters poll for a 1.3- MMbbl draw.
Crude stocks at the Cushing, Oklahoma, delivery hub rose by 840,000 bbl.
"As we descend into seasonal refinery maintenance, a chunky drop in refining activity has ushered in a build to crude inventories,” said Matt Smith, analyst at ship tracking firm Kpler.
Global Brent and U.S. crude futures pared gains following the report to up a little over 2%. They had been up by 3% earlier in the day.
Refinery crude runs fell by 662,000 bpd, while refinery utilization rates fell by 3.3% in the week to 87.6%, the EIA said. Many refiners begin seasonal maintenance after the summer driving season ends.
"It's a big pullback in the refinery utilization rate. Right there is the vast majority of your build," said Bob Yawger, director of oil futures at Mizuho in New York. "Those barrels get stuffed into storage," he added.
Meanwhile, U.S. gasoline stocks rose by 1.1 MMbbl in the week to 221 MMbbl, the EIA said, compared with analysts' expectations for a 67,000-bbl draw.
Gasoline product supplied, a proxy for demand, fell on the week to 8.5 MMbpd, down from 9.2 MMbpd. Meanwhile distillates supplied fell 3.6 MMbpd, from 4 MMbpd last week.
“The bottom just fell out of summer gasoline demand, and there was a decent sized drop in distillate fuel demand too,” said John Kilduff, partner at Again Capital
Distillate stockpiles, which include diesel and heating oil, fell by 1.3 MMbbl in the week to 122 MMbbl, compared with analysts' expectations for a 1.54-MMbbl draw.
Net U.S. crude imports rose last week by 191,000 bpd, the EIA said.
Comments