U.S. crude stockpiles surged last week, driven by a big rise in imports and inventory build at the key oil hub at Cushing, Okla., while gasoline drew down unexpectedly, the Energy Information Administration (EIA) said Feb. 8.
Crude inventories were up 13.8 million barrels (MMbbl) in the week to Feb. 3, compared with expectations for an increase of 2.5 MMbbl.
Crude imports jumped, rising 1.1 MMbbl/d, with a big increase in imports at the Gulf Coast, where crude stocks rose by 10.9 MMbbl, the largest weekly rise on record, to 267.6 MMbbl. That figure is also a record.
Crude stocks at the Cushing delivery hub for U.S. crude futures rose 1.1 MMbbl, EIA said.
Demand for the feedstock slipped as refinery crude runs fell 54,000 bbl/d and refining utilization rates edged down 0.5 percentage point to 87.7% of the nation's total capacity.
Gasoline stocks fell 869,000 bbl, vs. analyst expectations for a 1.1 MMbbl gain, offsetting some of the bearish crude data.
"It appears gasoline demand as measured for the week has rebounded to near-normal levels, which offsets some of the report's other bearish elements," said John Kilduff, partner at Again Capital LLC in New York.
Oil prices rose after the data, with U.S. crude rebounding into positive territory. By 10:13 a.m. CT (16:13 GMT), U.S. futures were up 30 cents, or 0.5%, at $52.47 a barrel, off the day's low of $51.22, as U.S. gasoline futures jumped 2.4%.
Brent crude gained 43 cents, or 0.8%, to $55.48/bbl.
The rise in oil prices was somewhat surprising, as the big build in stocks undermines expectations for tighter supply. However, industry group American Petroleum Institute reported a slightly bigger crude build of 14.3 MMbbl on Feb. 7, so the EIA data confirmed already lofty expectations.
Speculators have maintained long positions in this market, anticipating further gains in oil as OPEC continues to reduce production.
"The crude oil inventory build was really terrible for the market but the market does not seem to care because the products inventories were better than expected and are dragging crude oil prices up with it," said Andrew Lipow, president of Lipow Oil Associates in Houston.
Distillate stockpiles, which include diesel and heating oil, rose 29,000 bbl, vs. expectations for a 300,000-bbl increase, the EIA data showed.
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