With refiners unable to process crude, gasoline and distillate inventories also dropped dramatically, especially in the Gulf Coast region where their declines set records, the U.S. Energy Information Administration said Wednesday.
Crude inventories rose by 21.6 million barrels, the largest one-week increase ever, in the week to Feb. 26 to 484.6 million barrels. Analysts had anticipated a 932,000-barrel drop.
“This drop is 100% based upon the storm in Texas,” said John Kilduff, partner at Again Capital Markets in New York. “It was very bullish for refineries and very bearish for oil, it was the crack spread siege.”
The storm shut U.S. refining capacity along the Gulf Coast, while demand remained in other parts of the country. Refinery crude runs fell by 2.3 million barrels per day in the last week, and the overall refinery utilization rate plunged 12.6 percentage points to an all-time low at 56%, EIA said.
U.S. Gulf Coast refining use dropped to just over 40% of its overall capacity, a record low. Several major refiners along the Gulf shut outright during the storm and had to deal with frozen components as they restarted slowly.
“I’m not surprised, I’m surprised it took an extra week to all kick in. It was a giant storm and it shut down every refinery in refinery row, basically,” said Bob Yawger, director of energy futures at Mizuho.
Oil prices jumped after the data, with U.S. crude futures climbing to $61.38 a barrel, a 2.7% increase as of 11:35 a.m. ET (1635 GMT). Brent rose 2.3% to $64.15 a barrel.
The increase in stocks was also driven by a big jump in U.S. crude imports, which rose by a net 1.66 million barrels per day, EIA said.
U.S. gasoline stocks fell by 13.6 million barrels in the week, the most ever, to 243.5 million barrels, compared with expectations for a 2.3 million-barrel drop.
Distillate stockpiles, which include diesel and heating oil, fell by 9.7 million barrels in the week to 143 million barrels, versus expectations for a 3 million-barrel drop.