By David Gaffen
U.S. crude oil stockpiles soared more than 14 million barrels last week, the largest weekly build since the U.S. Energy Department started keeping records in 1982, bolstered by hefty imports and a decline in refining runs.Oil prices fell after the data, with benchmark U.S. crude futures dropping 3.3 percent, or $1.57, to $45.12 a barrel, their lowest level since late September. Crude inventories rose 14.4 million barrels in the week to Oct. 28, the EIA said on Wednesday, compared with expectations for an increase of 1.0 million barrels.U.S. crude imports jumped by about 2 million barrels per day to just under 9 million bpd, the highest rate since September 2012."The wildly volatile import series has kept these reports interesting to say the least," said John Kilduff, partner at New York energy hedge fund Again Capital.
The massive build in supply represents a rebound after several weeks of sharp drawdowns in inventories that was kicked off by a 14-million-barrel draw in early September. That drop was initially thought to be an anomaly because of storm activity, but six of the seven weeks that followed also showed drawdowns. Refinery crude runs fell 104,000 bpd as utilization rates fell 0.4 percentage point to 85.2 percent of total capacity, data showed."With crude runs at their lows for the year and imports at their highest levels since 2012, one would expect this," said Scott Shelton, broker and commodities specialist with ICAP in Durham, North Carolina.
"I don't think that imports will stay this high and runs will be increasing from here. This tells me that while this is an ugly report, it's the worst we are going to see for the rest of the year." Gasoline stocks fell 2.2 million barrels, compared with analysts' expectations for a 1.1 million-barrel drop.
Distillate stockpiles, which include diesel and heating oil, fell 1.8 million barrels, versus expectations for a 1.9 million-barrel drop, the EIA data showed.Crude stocks at the Cushing, Oklahoma, delivery hub rose 89,000 barrels, EIA said. (Reporting By David Gaffen; Editing by Marguerita Choy)
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First Published On : Nov 2, 2016 21:35 IST