February 28, 2018
(Reuters) – U.S. crude stocks rose last week even as refineries hiked output, while gasoline inventories posted a surprisingly large increase, the Energy Information Administration said on Wednesday.
Crude inventories rose by 3 million barrels in the week to Feb. 23, compared with expectations for an increase of 2.1 million barrels.
The surprise was the weekly jump in gasoline stocks, by 2.5 million barrels. Analysts had expected a 190,000-barrel drop.
“Clearly the market is being led down by gasoline where inventories have continued to rise over the last several months to the point that they are within 2 percent of last year’s extraordinarily high inventories,” said Andrew Lipow, president at Lipow Oil Associates in Houston.
Gasoline futures were down sharply. RBOB futures slid 2.3 percent to $1.7620 a gallon, while U.S. crude lost 1.2 percent to $62.23 a barrel as of 10:47 a.m. EST (1547 GMT). London-based Brent dropped 1.2 percent to $65.82 a barrel.
Overall gasoline inventories rose to 251.8 million barrels, below levels seen in the last two years, but still above the five-year average for this time of year.
“The inventory levels certainly do not bode well for refining margins over the next couple of months,” said Lipow.
Refinery crude runs rose by 49,000 barrels per day, EIA data showed. Refinery utilization rates fell by 0.3 percentage points.
Stocks continued to fall at the Cushing, Oklahoma, delivery hub, where inventories fell by 1.2 million barrels, EIA said, the 10th consecutive week of declines. Inventories in Cushing now sit at just 28.8 million barrels, and have been halved over the last two-plus months.
Distillate stockpiles, which include diesel and heating oil, fell by 1 million barrels, versus expectations for a 709,000-barrel drop, the EIA data showed.
Net U.S. crude imports rose last week by 860,000 barrels per day.
Reporting By David Gaffen; Editing by David Gregorio