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A maze of crude oil pipes and valves at the Strategic Petroleum Reserve, in Freeport, Tex., on June 9, 2016.

Richard Carson/Reuters

U.S. crude oil stockpiles rose last week, breaking a streak of eight weeks of declines, as imports surged to their highest in a year, the Energy Information Administration said on Wednesday.

Crude inventories rose by 2.1 million barrels in week to July 16 to 439.7 million barrels, compared with analysts’ expectations in a Reuters poll for a 4.5-million-barrel drop.

U.S. crude imports last week rose to 7.1 million barrels a day (b/d), their highest since July, 2020, boosting net crude imports to their loftiest since December at 4.6 million b/d. Exports also dropped 1.6 million b/d as the price differential between U.S. crude futures and Brent crude has narrowed, making exports less attractive to foreign buyers.

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“It was a bearish report for sure. That crude oil build was obviously a surprise driven by a surge in imports – I guess the higher prices attracted some barrels – and a plunge in exports,” said John Kilduff, partner at Again Capital in New York.

Even though analysts saw the report as bearish, oil prices were higher on the news. U.S. crude was US$2.70, or 4 per cent, higher on the day at US$69.89 a barrel as of 10:49 a.m. ET. Brent rose US$2.49 a barrel, or 3.6 per cent, to US$71.84.

Crude stocks have steadily declined throughout the year as overall demand rose and becaus eof relatively tight supply worldwide with major oil producers constraining demand. This week, the Organization of the Petroleum Exporting Countries and allies including Russia agreed to boost output.

U.S. fuel demand, measured by product supplied, rose last week, and the overall four-week average of 20.6 million b/d was on par with consumption two years ago, prior to the coronavirus pandemic. The four-week average of gasoline supplied was 9.4 million b/d, also in line with trends from two years ago.

U.S. gasoline stocks fell by 121,000 barrels, compared with forecasts for a one-million-barrel drop. Distillate stockpiles, which include diesel and heating oil, fell by 1.3 million barrels in the week versus expectations for a 557,000-barrel rise.

Refinery operations were largely steady with crude runs down 86,000 b/d and utilization rates edged 0.4 percentage points lower to 91.4 per cent in the week.

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