U.S. crude stocks rose last week as refineries cut output to the lowest level in nearly two years and production edged higher to a record of 12.6 million barrels per day (MMbbl/d), the Energy Information Administration (EIA) said on Oct. 9.
Crude inventories rose by 2.9 MMbbl in the last week, compared with analysts' expectations for an increase of 1.4 MMbbl.
Production climbed by 200,000 bbl/d to a record of 12.6 MMbbl/d, the data showed.
Refinery crude runs fell by 361,000 bbl/d, EIA data showed, while refinery utilization rates fell by 0.7 percentage point to the lowest level since October 2017, the data showed.
Oil prices were little changed after briefly extending losses after the release of the data.
"Total crude oil production rose which I think is probably the key point in keeping gains at bay here. Despite rig counts being lower, production is being resilient," said Tony Headrick, energy market analyst at CHS Hedging.
U.S. energy firms reduced the number of oil rigs for a record 10th month in a row through September as producers follow through on plans to cut spending on new drilling this year.
The drop in refining activity has helped contribute to the build in oil inventories despite the drop in net imports, said Matt Smith, director of commodity research at ClipperData.
Net U.S. crude imports fell last week by 601,000 bbl/d while gross exports jumped 534,000 bbl/d to 3.4 MMbbl/d, the highest since June 21, when exports hit a record 3.8 MMbbl/d.
"We are in the depths of fall maintenance but both strong exports and weak imports have helped limit the build," Smith said.
Gasoline stocks fell by 1.2 MMbbl, compared with analysts' expectations in a Reuters poll for a 257,000-bbl drop.
Distillate stockpiles, which include diesel and heating oil, fell by 3.9 MMbbl, vs. expectations for a 2.1 MMbbl drop, the EIA data showed.
Crude stocks at the Cushing, Okla., delivery hub rose by 941,000 bbl, EIA said.
Oil major Exxon Mobil said Jan. 31 it would create three new separate E&P companies, effective April 1, in an effort to double its profit by 2025.
Oilfield services companies will need to preserve capital and ride out the storm before they can expect to see an uptick in activity.
NexTier Oilfield Solutions CEO Robert Drummond joins Hart Energy editors for a conversation centered on his outlook for the oilfield services sector’s recovery on the other side of this downturn.