SunSirs: EIA: US Crude Oil Inventories Unexpectedly Increased Last Week, Refined Product Inventories Rise More Than Expected

On Wednesday, December 3, data released by the US Energy Information Administration (EIA) showed that US commercial crude oil, gasoline, and distillate fuel inventories all increased last week.

The data showed that US crude oil inventories increased by 574,000 barrels to 427.5 million barrels in the week ending November 28. Analysts had expected a decrease of 800,000 barrels.

Crude oil and gasoline futures prices narrowed their gains after the data release. The weekly crude oil inventory report was delayed due to technical issues.

Following the report's release, US heating oil futures extended their losses.

The EIA stated that crude oil inventories at the Cushing, Oklahoma delivery hub decreased by 457,000 barrels to 21.3 million barrels during the week.

The EIA indicated that refinery crude oil processing volumes increased by 433,000 barrels per day last week, and refinery capacity utilization increased by 1.8 percentage points to 94.1%.

U.S. strategic petroleum reserves rose by 250,000 barrels to 411.674 million barrels this week.

"We are indeed seeing refiners react to improved margins by increasing refinery volumes," said Phil Flynn, senior analyst at Price Futures Group.

U.S. gasoline inventories rose by 4.518 million barrels to 214.42 million barrels this week, compared to analysts' expectations of an increase of approximately 1.5 million barrels; distillate fuel inventories, including diesel and heating oil, rose by 2.1 million barrels to 114.3 million barrels, compared to analysts' expectations of an increase of approximately 700,000 barrels.

EIA data showed that U.S. crude oil production increased by 1,000 barrels per day to 13.82 million barrels per day this week.

A measure of demand—petroleum product supply—decreased by 51,000 barrels per day to 20.19 million barrels per day. Gasoline supply decreased by 400,000 barrels per day to 8.33 million barrels per day; distillate fuel supply increased by 68,000 barrels per day to 3.43 million barrels per day.

U.S. net crude oil imports fell 470,000 barrels per day to 2.37 million barrels per day during the week. Imports totaled 5.98 million barrels per day, a decrease of 455,000 barrels per day; exports totaled 3.61 million barrels per day, an increase of 15,000 barrels per day.

U.S. crude oil imports from Mexico fell 431,000 barrels per day to a record low of 131,000 barrels per day during the week, below the previous record low of 149,000 barrels per day for the week ending January 31.

Andrew Lipow, president of Lipow Oil Associates, said, “The across-the-board increase in U.S. crude oil and refined product inventories will put pressure on oil prices and refinery margins. This pressure is likely to persist as refinery utilization rates rise above 94% amid seasonally declining gasoline demand.”

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