U.S. crude oil stockpiles rose last week for the third consecutive weekly build as refineries continued to reduce output for seasonal maintenance, while gasoline inventories grew unexpectedly, the Energy Information Administration (EIA) said Oct. 11.
Crude inventories rose 6 million barrels in the week to Oct. 5, compared with analysts' expectations for an increase of 2.6 million barrels. The build was in part due to a 2.4 million-barrel increase in stocks at the Cushing, Okla., delivery hub for U.S. crude futures.
Net U.S. crude imports fell last week by 1.4 million barrels per day (bbl/d) to 4.8 million bbl/d, the lowest rate since at least 2001 when the EIA began tracking the data. Weekly figures like this are volatile, however.
The stock build fed recent selling in the oil market, which has also been happening in tandem with a broader sell-off across global equity and bond markets. U.S. crude West Texas Intermediate futures dropped 2.5% to $71.26 a barrel, while Brent crude was off 2.7% to $80.88 a barrel.
Refinery crude runs fell by 352,000 bbl/d, EIA data showed.
Refinery utilization rates fell by 1.6 percentage points to 88.8% of nationwide capacity, led by a slowing in activity in the Midwest, where utilization fell to 73.3% of capacity, the lowest since EIA started tracking that data by region in 2010.
"The steep decline in refinery run rates helped to produce the inventory gain," said John Kilduff, a partner at Again Capital Management in New York.
Several major refineries in the Midwest, including BP Plc's (NYSE: BP) facilities in Whiting, Ind., and HollyFrontier Corp.'s (NYSE: HFC) plant in El Dorado, Kan., are currently undergoing maintenance.
Gasoline stocks rose by 1 million barrels, compared with expectations in a Reuters poll for a fall of 42,000 barrels.
Gasoline futures were down 3.2% to $1.9557 a gallon, in part due to an increase in East Coast stocks, which have risen to 70.6 million barrels, compared with 58.2 million barrels at this time a year ago.
"Gasoline is leading the market down as continued high levels of imports into the East Coast have led to inventory levels that are 20% higher than this time last year," said Andrew Lipow, president of Lipow Oil Associates in Houston.
Distillate stockpiles, which include diesel and heating oil, fell by 2.7 million barrels, vs. expectations for a 2 million-barrel drop, the EIA data showed.