U.S. crude stockpiles surged by nearly 9 MMbbl last week due to a combination of increased imports and ongoing releases from government emergency reserves, the Energy Information Administration (EIA) said on Sept. 8.
Crude inventories rose by 8.8 MMbbl in the week to Sept. 2 to 427.2 MMbbl, compared with analysts' expectations in a Reuters poll for a 250,000-bbl drop.
The United States imported roughly 6.8 MMbbl of crude per day in the most recent week while exports dropped, and a release of another 7.5 MMbbl from the U.S. Strategic Petroleum Reserve also boosted commercial stocks.
The releases, which have shrunk the SPR to its lowest in nearly four decades, are set to end in October and production growth may not be enough to prevent balances from shrinking. U.S. crude output has steadied at 12.1 MMbbl/d.
Refinery crude runs fell by 309,000 bbl/d in the last week, and utilization rates fell by 1.8 percentage points to 90.9% of overall capacity, largely due to a sharp drop in Midwest refining.
Gasoline stocks rose by 333,000 bbl in the week to 214.8 MMbbl. Overall gasoline product supplied, a proxy for demand, was 8.8 MMbbl/d over the last four weeks, down 8% from the year-ago period.
"This crude build is showing how the market is softening. The refinery utilization has been cut materially over the past few weeks as we’re down 900,000 bb/d year on year for gasoline demand," said John Kilduff, partner at Again Capital LLC in New York.
Distillate stockpiles, which include diesel and heating oil, rose by 95,000 bbl. Refiners have been trying to rebuild distillate inventories in anticipation of winter demand, while also satisfying purchases from overseas buyers, particularly in Europe.
Net U.S. crude imports rose by 1.36 MMbbl/d, EIA said.
Oil prices rose modestly on the data. U.S. crude was up 1.7% to $83.33 a barrel while Brent gained 0.9% to $88.83 a barrel,
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