NEW YORK (Reuters) – U.S. crude oil stocks posted the biggest weekly build in nearly two years last week as production hit a new record high and the government released more barrels from its reserve, the Energy Information Administration said on Thursday.
Crude inventories soared 10.3 million barrels in the week to Nov. 9 to 442.1 million barrels, the highest level since early December 2017, compared with analysts’ expectations for an increase of 3.2 million barrels. That was the biggest weekly increase since February 2017.
U.S. crude production also climbed by 100,000 barrels per day (bpd) to 11.7 million bpd, the highest on record, while net U.S. crude imports rose 268,000 bpd, the data showed.
“A good chunk of the crude build occurred on the Gulf Coast, as refining activity dropped,” said Matt Smith, director of commodity research at ClipperData, referring to the region’s 5.2 million-barrel build.
“Common themes are threaded through this report as in recent weeks – another SPR release and another increase to domestic production.”
The U.S. Department of Energy had offered about 11 million barrels of oil for sale from the nation’s Strategic Petroleum Reserve (SPR), to be delivered between Oct. 1 through Nov. 30 and those barrels have now been arriving in the market, traders said.
Inventories in the SPR dropped by about 1.4 million barrels last week to the lowest level since 2004, according to EIA data.
Oil prices, however, held gains after the bearish build in crude as the market focused instead on the decline in fuel stockpiles.
“Obviously the headline crude build was shocking but the market is not falling apart in part due to the fact that we saw big drops in gasoline supplies … and distillate fuels. The products are definitely supporting us right now, said Phil Flynn, analyst at Price Futures Group in Chicago.
Gasoline stocks fell by 1.4 million barrels, compared with analysts’ expectations in a Reuters poll for a 1.5 million-barrel drop.
Distillate stockpiles, which include diesel and heating oil, fell by 3.6 million barrels, versus expectations for a 1.7 million-barrel drop, the EIA data showed.
Crude stocks at the Cushing, Oklahoma, delivery hub rose by 1.17 million barrels, EIA said.
Refinery crude runs rose by 24,000 bpd, EIA data showed. Refinery utilization rates rose by 0.1 percentage point to 90.1 percent of total capacity.
Reporting by Devika Krishna Kumar in New York; Additional reporting by Stephanie Kelly in New York; Editing by Marguerita Choy