Oil Builds As Refiners Cut Runs
U.S. crude oil stockpiles rose last week as refineries sharply reduced output for seasonal maintenance, while gasoline stocks increased and distillate inventories fell, the Energy Information Administration said on Wednesday.
After five consecutive weeks of drawdowns to the lowest levels since February 2015, crude inventories rose 1.9 million barrels to 396 million barrels in the week to Sept. 21. The build was unexpected as analysts forecast a decrease of 1.3 million barrels.
Refinery crude runs fell by 901,000 barrels per day, EIA data showed. Refinery utilization rates fell by 5 percentage points to 90.4 percent, the lowest since May, driven by seasonal declines in Midwest and East Coast refining activity.
“The drop in refinery runs was pretty substantial, which shows maintenance season is kicking into high-gear. The drop in distillates is very supportive because that is the soft spot that people are focused on,” said Phil Flynn, an analyst at Price Futures Group in Chicago.
Oil prices held relatively steady following the data. U.S. crude oil futures were down 35 cents to $71.93 a barrel, while Brent dropped 27 cents to $81.60 a barrel. The two benchmarks have been on the rise of late due to swifter-than-expected declines in Iranian exports and notable declines in U.S. crude inventories.
Distillate stockpiles, which include diesel and heating oil, fell 2.2 million barrels, versus expectations for a 752,000-barrel increase, the EIA data showed.
In response to the data showing the drawdown in diesel and heating oil stocks, distillate cracks HOc1-CLc1, an indication of refining margins, rose 1 percent to $15 a barrel.
Net U.S. crude imports fell last week by 495,000 bpd.
Crude stocks at the Cushing, Oklahoma, delivery hub rose by 461,000 barrels, EIA said.
Gasoline stocks rose by 1.5 million barrels, compared with analyst expectations in a Reuters poll for a 788,000-barrel gain.