US crude stocks up by 3.3 million barrels
US crude stocks and gasoline inventories increased last week on declining refinery runs and falling exports, according to the United States Energy Information Administration.
On Wednesday, the IEA reported crude inventories rose by 3.3 million barrels during the week ending June 2. Analysts had predicted a fall of 3.5 million barrels and were surprised by the first increase in crude stocks in 10 weeks.
The increase overshadowed analysts’ belief that global inventories were falling and drawing down to seasonal averages.
Following the release of the EIA data, US crude futures fell sharply, dropping over 4 per cent to $46.12 by 11:04 a.m. EDT.
“Crude, gasoline and distillates inventories are all at or above the top of their five-year ranges; supply remains plentiful,” Matt Smith, director of commodity research at ClipperData told Reuters.
As refiners edged off record processing levels reached one week earlier, gasoline stocks rose by 3.3 million barrels, higher than analysts’ predictions of an increase of 580,000 barrels.
Gasoline blendstock futures on the New York Mercantile Exchange dropped about 4 per cent following the release of the data.
“Normally, gasoline stocks are supposed to decline at this time of the year due to strong demand,” Carsten Fritsch, oil analyst at Commerzbank in Frankfurt, Germany told Reuters.
EIA data reported refinery crude runs were down by 283,000 barrels per day (b/d), to 17.2 million b/d. Refinery utilization rates dropped by 0.9 per cent to 94.1 per cent.
Crude stocks at the Cushing delivery hub fell by 1.4 million barrels, according to the EIA report.
US crude exports fell last week to 557,000 b/d from a record of 1.3 million b/d in the previous week. US crude imports rose by 1.1 million b/d last week.
Distillate inventories, including diesel and heating oil, increased by 4.4 million barrels. Analysts had predicted a much smaller increase of 281,000 barrels.
