U.S. crude oil inventories rose unexpectedly last week as exports fell, while gasoline stocks decreased and distillate inventories rose, the Energy Information Administration (EIA) said Aug. 1.
Crude inventories rose 3.8 million barrels in the week to July 27, compared with analysts' expectations for a decrease of 2.8 million barrels.
Crude stocks at the Cushing, Okla., delivery hub fell by 1.3 million barrels, the EIA said, the lowest level since October 2014. Inventories at the delivery point for U.S. crude futures have plunged after an outage at Syncrude's oil sands facility in northern Alberta, Canada, in June dented flows to the hub.
Refinery crude runs rose by 195,000 barrels per day, EIA data showed, while refinery utilization rates rose by 2.3 percentage points to 96.1% of total capacity.
However, weekly crude exports dropped by about 1.4 million barrels per day (bbl/d), sending stockpiles in the Gulf Coast surging and pushing net U.S. crude imports up last week by 1.4 million bbl/d.
"Despite a rise in refinery runs, a cratering in crude exports last week yielded a whopping crude build of 5.6 million barrels on the Gulf Coast—leading to a solid build of 3.8 million barrels for total U.S. stocks," said Matt Smith, director of commodities research at ClipperData.
"The narrowing of the Brent-WTI spread typically impacts exports on a lagged basis [and] we're starting to see the effect of that."
U.S. crude's discount to Brent narrowed rapidly through June after sinking to the widest in more than three years in early June.
Gasoline stocks fell 2.5 million barrels, compared with analysts' expectations in a Reuters poll for a 1.3 million-barrel drop.
Distillate stockpiles, which include diesel and heating oil, rose 3 million barrels, vs. expectations for a 264,000-barrel increase, the data showed.
Oil prices pared losses briefly after the data, but were still trading about 1% lower on the day.
"Despite the crude oil inventory rise, the report is supportive of prices. Demand for crude oil from refiners is very high, and gasoline demand remains sky-high, as well," said John Kilduff, partner at Again Capital Management in New York.
"U.S. oil production growth appears to have stalled out and actually declined a fair amount on the week."
Weekly U.S. oil production dropped by about 100,000 bbl/d to 10.9 million bbl/d last week, EIA data showed.
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