(Reuters) – U.S. crude oil stockpiles rose by their most in a week since March 2017, driven in part by a build at the Cushing, Oklahoma, hub and a drop in exports, the Energy Information Administration said on Wednesday.
Crude inventories jumped by 8 million barrels in the week to Sept. 28, four times analysts’ expectations.
The surprise surge offsets what has been a steady drawdown in U.S. crude inventories in recent months. Before this week, stocks were at their lowest since February of 2015; they now stand at 404 million barrels, not including the U.S. strategic reserve.
“I think we need to see weeks of these numbers to really wipe out worries about how tight supplies are,” said Gene McGillian, director of market research at Tradition Energy in Stamford, Connecticut.
Net U.S. crude imports rose last week by 1.1 million barrels per day as exports fell 913,000 bpd. Over the past four weeks, crude oil imports averaged about 7.8 million bpd, 10.2 percent more than the same four-week period last year, the EIA said.
Stocks at the Cushing delivery hub for U.S. crude futures rose by 1.7 million barrels, EIA said.
Crude prices dropped notably on the news before rebounding a bit. U.S. West Texas Intermediate fell 28 cents to $74.95 a barrel, while Brent lost 9 cents to $84.74 a barrel as of 10:40 a.m. EST (1440 GMT).
Oil prices have been rising as the United States is set to re-establish sanctions against Iran that have already reduced exports from OPEC’s No. 3 producer. Both crude benchmarks have been trading near four-year highs.
Refining activity held steady nationwide last week with crude runs inching up 77,000 bpd and utilization rates remained unchanged at 90/4 percent of total capacity.
However, Midwest refinery utilization rates dropped to 78.9 percent, to their lowest since Oct. 2015, according to the data.
Gasoline stocks fell by 459,000 barrels, compared with analysts’ expectations in a Reuters poll for a 1.3 million-barrel gain.
Distillate stockpiles, which include diesel and heating oil, fell 1.8 million barrels, versus expectations for a 1.3 million-barrel drop, the EIA data showed.
Reporting By David Gaffen; additional reporting by Stephanie Kelly; Editing by Marguerita Choy