On Wednesday, the US Energy Information Administration (EIA) said that the country’s commercial crude oil inventories hit a record high for the third consecutive week but gasoline stockpiles went down on the jump in demand.
In the week to June 19, crude stockpiles soared by 1.4 million barrels to 540.7 million barrels. Analysts only expected an increase of 299,000 barrels.
On the Gulf Coast, crude inventories also broke another record high. However, at the Cushing, Oklahoma, delivery hub, crude stocks dipped by 991,000 barrels.
Reacting to the news, Wednesday’s crude prices slumped. By 2.48 PM GMT, US WTI crude futures dropped by 3.8% or USD1.54 to USD38.83/barrel, and Brent fell by 3.9% or USD1.67 to USD40.96/barrel.
US gasoline inventories slipped by 1.7 million barrels when analysts only estimated a 1.3 million barrel drop. Demand for gasoline was stronger, indicated by gasoline supplied rose by 9%. Nevertheless, the fuel demand is still down by 17% year-on-year.
Distillate inventories climbed by 249,000 barrels instead of the expectations for a 620,000 barrel plunge. The stocks were at a record high in the US Gulf Coast region.
Analyst Phil Flynn of Price Futures Group commented that the jump in weekly gasoline demand indicated an improvement.
The country’s crude oil output rebounded to 11 million bpd from 10.5 million bpd in the previous period, as offshore facilities shut due to Storm Cristobal have started operations.
Separately, net US crude imports slumped by 797,000 bpd last week after several weeks of soaring imports mainly from Saudi Arabia due to the cheap prices in the volume war.
