Unexpected Rise in U.S. Crude Stockpiles Driven by Surge in Imports, EIA Reports.
U.S. crude oil inventories saw an unexpected increase last week, primarily due to a significant rise in imports, according to the Energy Information Administration (EIA). The report, released on Wednesday, detailed a rise in crude stockpiles by 3.7 million barrels, bringing the total to 459.7 million barrels for the week ending June 7. This contrasted sharply with analysts’ expectations, which had predicted a 1 million-barrel draw.
The EIA attributed the surprise build to an uptick in U.S. crude imports, which surged by 2.56 million barrels per day (bpd), reaching their highest level since August 2019. Notably, commercial crude imports hit their peak since August 2018, with West Coast imports marking their strongest level since 2022.
Following the report, both Brent and West Texas Intermediate (WTI) crude futures saw reduced gains. Brent crude was trading at $82.03 a barrel, up 15 cents, while WTI was at $77.97, up 6 cents, having both been up over a dollar earlier in the day.
The EIA also noted a decrease in U.S. crude exports, which fell by 1.31 million bpd to 3.19 million bpd. Tim Evans, an independent energy analyst, commented on the broader context, explaining, “The U.S. tends to import heavier crude oil and export lighter crude, which is part of the current scenario.”
The import surge was significantly influenced by increased shipments of heavy crude from Mexico, which rose by 449,000 bpd to 987,000 bpd, the highest in seven months. Additionally, imports from Canada climbed by 206,000 bpd to nearly 4 million bpd, spurred by the expanded Trans Mountain pipeline, which boosted crude volumes to the West Coast following its May startup.
Refinery crude runs dropped by 97,000 bpd in the week ending June 7, and refinery utilization rates fell by 0.4 percentage points to 95%.
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In terms of fuel inventories, U.S. gasoline stocks increased by 2.6 million barrels to 233.5 million barrels, surpassing analysts’ expectations of a 0.9 million-barrel build. Distillate stockpiles, which include diesel and heating oil, rose by 0.9 million barrels to 123.4 million barrels, though this was below the anticipated 1.6 million-barrel rise.
The EIA reported that fuel exports hit a record high, increasing by 1.4 million barrels last week to 7.5 million bpd. Meanwhile, crude stocks at the Cushing, Oklahoma delivery hub fell by 1.6 million barrels.
This comprehensive data underscores the dynamic nature of the oil market, influenced by factors such as import-export balances and refinery operations. The insights provided by the EIA highlight the complexities and interconnectedness of global oil supply and demand dynamics.
