NEW YORK: US crude oil stockpiles soared unexpectedly last week as imports climbed and production edged higher to a new record, the Energy Information Administration said on Wednesday.
Refined fuel inventories fell more than expected, with gasoline drawing down for a seventh straight week, as refining rates remained low, the data from the statistical arm of the Department of Energy showed.
Crude inventories rose by 7.2 million barrels in the week to March 29, compared with analysts' expectations for a decrease of 425,000 barrels.
Most of the build was in the Gulf Coast, where stockpiles rose by 8.7 million barrels, the biggest increase in the region since September 2017. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 201,000 barrels, the EIA said.
Crude production climbed 100,000 barrels per day (bpd) to a record 12.2 million bpd, after hovering around 12-12.1 million bpd since mid-February, according to the data.
Net U.S. crude imports rose last week by 386,000 bpd while exports dropped by 163,000 bpd to 2.7 million bpd.
After the data, oil prices were little changed on the day, with U.S. crude up 5 cents at $62.63 a barrel and Brent up 10 cents at $69.47 a barrel. Both benchmarks are still near the highest levels this year.
"The market was originally surprised by the crude oil build but on closer inspection it's all on the Gulf Coast which can be a reflection of unscheduled refinery outages as well as closure of the Houston ship channel impacting exports," said Andrew Lipow, president of Lipow Oil Associates in Houston.
Last week, restrictions were in place at the busiest U.S. energy port, affecting nearby refineries and slowing efforts to end a shipping bottleneck after a massive petrochemical fire and spill near Houston halted vessel traffic for several days.
"Overall, it's surprising to see refinery utilization nationwide as low as it is, which has contributed to a decline in product inventories supporting the market," Lipow said.
Refinery crude runs rose by 18,000 bpd and refinery utilization rates fell by 0.2 percentage point to 86.4 percent of total capacity, EIA data showed.
Gasoline stocks fell 1.8 million barrels, compared with analysts' expectations in a Reuters poll for a 1.5 million-barrel drop.
Distillate stockpiles, which include diesel and heating oil, fell 2 million barrels, versus expectations for a drop of 506,000 barrels, the EIA data showed.
"Even though this is a shockingly bearish number on the headline, the fact that a lot of people will figure out shortly that this is probably a number that's going to be reversed very quickly, would mean that the downside selling should be somewhat limited," said Phil Flynn, an analyst at Price Futures Group in Chicago.