On Thursday, the US Energy Information Administration said that last week, the country’s crude oil inventories rose as refiners cut crude oil processing rates on the back of Hurricane Laura.
In the week ended September 4, crude stockpiles went up by 2 million barrels to 500.4 million barrels. Analysts in a Reuters poll only expected a 1.3 million barrels fall.
According to some analysts, the build-up in crude inventories was caused by the feeble fuel demand on the back of the coronavirus pandemic and the decrease of gasoline consumption.
Last week, the crude processing rates on the US Gulf Coast dipped as many facilities in the area were evacuated ahead of Hurricane Laura. However, analysts also predicted that in the coming months, the overall capacity use would also be lower as margins have weakened and distillate stockpiles are high.
The country’s refinery crude run dropped by 1.1 million bpd last week, while the refinery utilization rate slipped by 4.9% to 71.8% of total capacity. The capacity use in the US Gulf Coast, specifically, nosedived to 63.9%, the lowest since Hurricane Harvey in September 2017.
Gasoline product supplied tumbled last week, remains 10% lower than the average for this time of year. Gasoline stocks sunk by 3 million barrels to 231.9 million barrels, while the expectations were for a fall of 2.4 million barrels. Distillate stockpiles shrank by 1.7 million barrels, versus the predictions for a 557,000 barrels dive.
Crude inventories at the delivery hub at Cushing, Oklahoma, climbed by 1.8 million barrels, the highest since May.
Reacting to the readings, at 12.10 ET (16.10 GMT), Brent crude futures slipped by 35 cents to USD40.45/barrel while the US crude slipped by 27 cents to USD37.76/barrel.
