Crude oil storage tanks stand at the Cushing oil hub in Cushing, Okla., on April 21, 2020.Dronebase Dronebase/Reuters
U.S. crude oil stockpiles jumped by nearly 14 million barrels last week while fuel inventories plunged, as production and refining output slowly came back online in the wake of the Texas winter storms, the Energy Information Administration said on Wednesday.
Crude inventories rose by 13.8 million barrels in the week to March 5 to 498.4 million barrels, compared with analysts’ expectations in a Reuters poll for an 816,000-barrel rise. Crude stocks dropped sharply in February after several days of freezing temperatures forced production to shut.
Refining activity rebounded as well, but with overall utilization rates lower than usual for this time of year, stocks of gasoline, heating oil and diesel continued to decline.
“Basically we’re still seeing the big impact from the storm,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “Crude production numbers are showing that number bounced up, so this could be a little bit of a headwind for prices because the production number is coming up faster than people thought.”
Oil prices rose modestly on the news. U.S. crude gained 35 cents to $64.38 a barrel while Brent was up 34 cents to $67.86 a barrel as of 10:42 a.m. ET (1542 GMT).
Refining processing jumped, with crude runs rose by 2.4 million barrels per day. Overall utilization rates rose by 13 percentage points, in the week, but that only brought overall capacity use to 69 per cent, far below seasonal averages for this time of year.
Crude production rose to 10.9 million bpd, though the EIA weekly figures are based on models and less accurate than monthly figures.
“We are basically back to where we were on domestic production, which came back faster than refinery utilization,” said Robert Yawger, director of energy futures at Mizuho.
U.S. gasoline stocks fell by 11.9 million barrels in the week to 231.6 million barrels, the EIA said, compared with expectations for a 3.5 million-barrel drop.
Distillate stockpiles, which include diesel and heating oil, fell by 5.5 million barrels versus expectations for a 3.5 million-barrel drop, the EIA data showed.
Net U.S. crude imports fell last week by 919,000 bpd, EIA said.
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