For a second week, U.S. crude inventories grew suddenly. Distillate stocks also grew, but the U.S. Energy Department reported Wednesday that the stocks of gasoline dropped much more than estimated.
Crude stocks increased by 1.4 million barrels in the last week, though analysts originally predicted a dip of 1.4 million barrels.
According to the Energy Information Administration, stocks of crude at the delivery center in Cushing, Oklahoma sank by 1.12 million barrels.
Tariq Zahir, a trader in crude spreads with New York’s Tyche Capital Advisors, said “You should be seeing draws across the board at this time of year,” he continued, “with spot prices getting under $40 yesterday, we are not surprised to see spot prices rebounding on the gasoline draw.”
September-ready WTI crude futures grew by 36 cents to $39.87 per barrel, or a gain of 0.9 percent. October-ready Brent crude futures grew by 31 cents to $42.11 per barrel, or a gain of 0.7 percent. According to data tabulated by the EIA, refinery crude increased by 266,000 barrels per day. Rates for refinery utilization increased by 0.9 percent.
Stocks of gasoline dropped by 3.3 million barrels, which overly exceeded analysts’ original prediction of a 200,000 barrel decrease.
“The 3.3 million barrel draw to gasoline stocks is likely a welcomed surprise for refiners,” said Troy Vincent, ClipperData analyst. ClipperData is an energy data provider and oil cargo tracker based in New York. Vincent continued, “But an unexpected, greater-than-1-million barrel build to crude stocks despite refinery utilization ticking higher by 0.9 percent should be cause for concern.”
Distillate stocks include both heating oil and diesel. These inventories grew by 1.2 million barrels, despite original predictions of 500,000 barrel decrease. Crude imports also grew last week by 301,000 barrels per day.
Article written by HEI contributor Briana Steptoe.