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U.S. crude and distillate stockpiles jump last week -EIA

U.S. crude oil and distillate inventories rose sharply last week, the Energy Information Administration said on Thursday, while fuel demand remained slack even as various states eased movement restrictions to stem the spread of the novel coronavirus.

Crude inventories rose 7.9 million barrels in the week to May 22 to 534.4 million barrels, driven largely by a sharp increase in imports, compared with expectations in a Reuters poll for a 1.9 million-barrel drop.

Distillate stockpiles, which include diesel and heating oil, rose by 5.5 million barrels in the week, the EIA data showed, versus a 1.8 million-barrel build forecast.

Crude stocks had begun to decline as refining picked up in the last few weeks due to fuel demand recovering somewhat from a drastic fall in April amid lockdowns.

However, four-week moving average figures on products supplied, a rough proxy for demand, still shows gasoline demand down 25% from the year-ago period, while diesel demand is off 14%.

Diesel product supplied fell in the most recent week while gasoline demand rose.

“The rally still has its legs on it but if there’s any deviation in any factors like demand returning or production being reduced, given how high global supply is, that could still change,” said Gene McGillian, vice president of market research at Tradition Energy.

Prices fell on the data. U.S. crude futures were down 0.5% to $32.64 as of 11:20 a.m. ET (1520 GMT), while Brent dropped 0.8% to $34.47 a barrel.

The big jump in crude inventories came even as stocks at the Cushing, Oklahoma, delivery hub for crude futures fell by 3.4 million barrels in the week, the EIA said. Total stocks rose due to a hefty jump in net crude imports of 2.1 million barrels per day.

Refinery crude runs rose by 88,000 bpd last week, and refinery utilization rates increased 1.9 percentage points to 71.3% of total capacity, the EIA said.

U.S. gasoline stocks fell 724,000 barrels to 255 million barrels, the EIA said, compared with analysts’ expectations in a Reuters poll for a 100,000-barrel rise.
Source: Reuters (Reporting By New York Energy Desk Editing by Marguerita Choy)

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