US crude, gasoline stocks build unexpectedly as refineries cut output
(Reuters) US crude and gasoline inventories rose unexpectedly last week as refineries cut output, the US Energy Information Administration said Wednesday, prompting a drop in oil futures.
Crude inventories rose 2.5 MMbbl in the week to August 19, compared with expectations for a decrease of 455 Mbbl. Crude stocks on the US East Coast soared 3.1 MMbbl, the biggest build since February 2015.
"The report is bearish, especially relative to expectations, led by the rise in crude oil inventories that was due to the refinery utilization declines and large rise in imports," said John Kilduff, partner at New York energy hedge fund Again Capital.
US crude imports rose last week by 449 Mbpd.
Refinery crude runs fell by 186 Mbpd as utilization rates slipped 1% to 92.5% of total capacity, data showed.
Gasoline stocks inched up 36 Mbbl, compared with expectations in a Reuters poll for a 1.2 MMbbl drop.
The weekly data shows that gasoline stocks in the US Gulf Coast reached a seasonal high not seen since 2013, which could reflect decreased activity due to weaker demand.
Overall, the surprising build in gasoline stocks leaves a "substantial 8.5% year-on-year inventory surplus in place with little time left in the driving season," said Tim Evans, Citigroup energy analyst, in a note.
After the data, US gasoline futures turned negative and US crude oil futures extended losses, trading 2.7% to $46.84/bbl by 11:13 a.m. (1513 GMT).
Crude stocks at the Cushing, Oklahoma, delivery hub for US crude futures rose 375 Mbbl last week, the EIA said.
Distillate stockpiles, which include diesel and heating oil, rose by 122 Mbbl, versus expectations for a 400 Mbbl increase, the EIA data showed. Overall stocks were at their highest weekly level on a seasonal basis since 2011, the EIA said.
Reporting by David Gaffen; Additional reporting by Barani Krishnan; Editing by Marguerita Choy
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