US gasoline stockpiles build for fourth week on weak demand
(Reuters) -- Inventories of gasoline rose sharply in the United States for the fourth straight week amid weaker-than-usual demand, while crude oil stocks were also higher, the Energy Information Administration said on Wednesday.
Crude inventories rose 2.8 million barrels in the week to Jan. 20, in line with expectations.
However, gasoline stocks surged 6.8 million barrels, compared with expectations in a Reuters poll for a 498,000-barrel gain.
In the past four weeks -- usually already a seasonally slow period for gasoline -- demand has totaled 8.3 million barrels per day, 4.7% lower than a year ago.
Carl Larry, director of oil and gas at Frost & Sullivan, said the gasoline build may be also due to refiners bracing for an intense maintenance season this spring. "It's been a trend over the last three weeks. I almost am thinking that we are preparing for the worst," he said.
The sharp increase in gasoline stocks initially pulled prices down across the energy complex, but buying then surged in crude futures, with nearly 10,000 US contracts trading around 10:42 a.m. ET as oil followed other asset classes, like stocks and bond yields, higher.
US crude dipped before recovering; it was last trading up 0.5% at $53.45 a barrel.
"The report was bearish across-the-board, with the building inventories and lackluster demand. But with Dow 20k and the rampant reflation trade, the losses couldn't hold. It is a case of no asset class left behind," said John Kilduff, partner at energy hedge fund Again Capital LLC in New York.
US gasoline futures, or RBOB, hit a low of $1.5156 a gallon before rebounding as crude rose. It was last down 1.7% at $1.54l89.
Gasoline cracks -- a measure of refining margins -- fell to $12.20 a barrel, lowest since Dec. 14, after the data.
Refinery crude runs fell 421,000 bpd last week as utilization rates dropped 2.4 percentage points to 88.3% of nationwide refining capacity, EIA data showed.
Distillate stockpiles, which include diesel and heating oil, rose by 76,000 barrels, versus expectations for a 1.0 million-barrel drop, the EIA data showed.
Crude stocks at the Cushing, Oklahoma, delivery hub for US crude futures fell 284,000 barrels, EIA said.
US crude imports fell last week by 463,000 bpd.
Reporting by David Gaffen, Jessica Resnick Ault, and Scott DiSavino in New York
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