U.S. crude oil stockpiles rose sharply last week as refineries cut output and exports dropped, while refined products extended a multi-week drawdown, the Energy Information Administration said on Wednesday.
Crude inventories rose by 7.9 million barrels in the week to Nov. 1, compared with analysts’ expectations in a Reuters poll for an increase of 1.5 million barrels.
The drop-off in refining utilization and a slump in exports, which some analysts believe is tied to reduced tanker availability due to U.S. sanctions on Chinese shipping firm COSCO, surprised many.
“I guess we stopped using oil last week. It’s amazing. This is definitely a shocking number – even if you’re bearish you’re shocked,” said Phil Flynn, an analyst at Price Futures Group in Chicago.
Oil prices were mixed, with global benchmark Brent crude futures down 14 cents to $62.82 but U.S. crude rising 6 cents to $57.29 per barrel as of 10:56 a.m. ET (1556 GMT).
Refinery crude runs fell by 237,000 barrels per day, EIA data showed. Refinery utilization rates fell by 1.7 percentage points to 86% of total capacity.
Distillate stockpiles, which include diesel and heating oil, fell by 622,000 barrels, versus expectations for a 949,000-barrel drop, the EIA data showed. Overall distillate inventories, which have declined for seven weeks in a row, fell to 119.1 million barrels, their lowest since June 2018.
Gasoline stocks also extended their decline, falling for the sixth straight week, with a 2.8 million-barrel draw, compared with analysts’ expectations for a 1.8 million-barrel drop.
Stockpiles of gasoline and distillate products were down in the U.S. Midwest to their lowest levels in a year.
Net U.S. crude imports rose last week by 336,000 bpd, as exports alone slumped nearly 1 million bpd to 2.4 million bpd.
Stocks at the Cushing, Oklahoma, delivery hub for U.S crude futures rose by 1.7 million barrels, the EIA said.
Cushing inventories have grown for five weeks in a row but that may switch in the next week after the closure of the 590,000-bpd Keystone Pipeline following a spill of more than 9,000 barrels in North Dakota last week, even tough analysts had expected to see an effect as early as this week.
“Cushing storage is up 15 million barrels above last year at this time,” said Bob Yawger, director of futures at Mizuho. “Cushing, which you would have thought would have been a negative number after the Keystone pipeline went down, is up 1.7 million.”