Unexpected Increase In US Crude Oil Stock Increased For 3 Consecutive Weeks
US stocks of crude oil rose for last three weeks. This might be the result of oil refineries have lowering the utilization rate during the maintenance period. Gasoline inventories increased unexpectedly.
The US Energy Information Administration (EIA) announced last week that US crude inventories rose 5,987,000 barrels last week. Analysts expected an increase of 2.62 million barrels.
Stock market Crude oil inventory in Cushing, Oklahoma, rose by 2359,000 barrels.
US crude oil imports fell 4.21 million barrels to 4.82 million barrels. It is the lowest level since 2001, when EIA began to compile. However, weekly indicators are highly volatile.
According to the EIA, crude oil throughput at US refineries last week fell by an average of 350,000 barrels a day.
The refining plant’s utilization rate dropped 1.6 percentage points to 88.8%. In particular, the utilization rate of oil refineries in the Midwest region was 73.3%, the lowest level since 2010 when EIA began collecting regional statistics.
“The plunge in the refining capacity utilization rate contributed to the increase in crude oil inventory,” said John Kilduff, partner at Agence Capital.
BP’s oil refinery in Whiting, Indiana, and Holly Frontier’s refinery in El Dorado, Kansas are under maintenance. In addition, some refineries in the Midwestern United States are undergoing maintenance.
Gasoline inventories increased by 951,000 barrels even market analysts expected a 42,000 barrel decline.
In particular, inventories of gasoline on the eastern coast increased to 70.6 million barrels. The record of the same period last year was 58.2 million barrels. As a result, the price of gasoline declined.
“Gasoline is driving the downturn in the market,” said Andrew Lipow, president of Lipo Oil Associates. “The volume of imports to the eastern seaboard has remained at a high level, and gasoline inventories have increased by 20 percent year-on-year,” .
Refining oil inventories, including heating oil and diesel, decreased by 266,600 barrels. The market expected a 2 million 5,000 bpd decrease.
Last week, US crude oil production increased by 100,000 bpd to a daily average of 11.2 million bpd.