EIA: US crude oil inventories are rising, but fuel is being drawn down due to ongoing maintenance.
The Energy Information Administration (EIA), which tracks seasonal refinery maintenance, reported on Wednesday that U.S. crude stockpiles increased and fuel inventories decreased last week.
The EIA reported that crude inventories increased by 1.4million barrels, to 435.2million barrels for the week ending March 7. This was compared to analysts' expectations in an online poll of a 2million-barrel increase.
The EIA reported that crude stocks at Cushing, Oklahoma's delivery hub, fell by 1.2 millions barrels in the past week.
The report prompted a rise in oil futures. Oil futures rose after the report.
This week, oil production was lower than expected. The gasoline and diesel draw were also higher than expected. The stronger demand could lead to higher oil prices, said Josh Young. Chief investment officer at Bison Interests.
The Strategic Petroleum Reserve's (SPR) crude inventories reached their highest level since the year 2022. U.S. Energy Sec. Chris Wright stated last week that President Donald Trump wants to fill up the Strategic Petroleum Reserve (SPR) to its maximum capacity. This could take several years and cost as much as $20 billion.
The EIA reported that refinery crude runs increased by 321,000 barrels a day. Utilization rates, which had been hovering around 85% since the middle of January, increased by 0.6 percentage points in the past week to reach 86.5%.
The EIA reported that gasoline stocks dropped by 5.7m barrels last week, to 241.1m barrels. This was compared to expectations of a 1.9m barrel draw. ?
The EIA reported that distillate stocks, which includes diesel and heating oil fell by 1.6m barrels last week, as compared to expectations of a drop of 800k barrels.
The U.S. futures for gasoline and heating oils both increased following the higher-than-expected drawdown in fuel stocks.
The EIA reported that net U.S. crude oil imports increased by 503,000 barrels per day (bpd) last week, to 2,18 million bpd. However, they remained below the average for this year of 2.24 millions bpd.
Matt Smith, an expert at ship tracking company Kpler, said that despite the expected build in crude inventories due to seasonal refinery maintenance as well as weaker exports, very low crude imports have displaced it. This is likely because of concerns about tariffs impacting Canadian flows.
He also mentioned maintenance at Phillips 66’s 258,000-bpd Bayway Refinery in New Jersey.
He added that "Imports to the U.S. East Coast remain low, as Bayway, the largest importer in the country, is down for maintenance on its CDU." Reporting by Liz Hampton, Denver; Editing and proofreading by Chizu Nomiyama & Marguerita Choy
(source: Reuters)
