(Refiles to correct spelling of Louisville in paragraph 3)
Jan 11 U.S. inventories of crude and refined oil
rose sharply and more than expected last week, with stocks of
distillates hitting six-year highs, as crude imports and
refining hit record highs, government data showed on Wednesday.
Crude inventories rose 4.1 million barrels in
the week to Jan. 6, the U.S. Energy Information Administration
said, higher than analyst expectations for a 1.2-million-barrel
"We have had a triumvirate of bearish builds from today's
report. Counter-seasonal strength in refinery runs have boosted
product inventories, while stronger imports have bolstered crude
stocks," said Matt Smith, director of commodity research at
energy data provider ClipperData in LouisvilLe, Kentucky.
The market's reaction was initially bearish, with a sharp
fall across the energy complex, but the selloff was quickly
reversed, in part because a record amount of crude was refined.
Refinery crude runs rose 418,000 barrels per
day to 17.1 million bpd, the highest level since EIA records
begin in 1982.
Refinery utilization rates rose 1.6 percentage
points to 93.6 percent of nationwide capacity, with rates in the
Gulf Coast region reaching 96.4 percent, the highest seasonal
levels since the EIA began collecting the data in 2010.
However, crude production also rose notably, particularly in
the lower 48 states. Overall production was 8.95 million bpd
last week, most since April of last year. That could undermine
the Organization of the Petroleum Exporting Countries' deal to
reduce a global glut.
Crude stocks at the Cushing, Oklahoma, delivery hub for U.S.
West Texas Intermediate (WTI) crude futures fell by
579,000 barrels, EIA said.
WTI was up 2.6 percent, or $1.31, to $52.13 a barrel
by 11:28 a.m. (1628 GMT). U.S. fuel prices also rose, with
heating oil futures up 2.4 percent and gasoline
over 3 percent higher.
Some of the increase in crude inventories can be attributed
to seasonal activities, as companies bring inventories onshore
after leaving them in floating storage to reduce a year-end tax
U.S. crude imports rose last week by 1.8
million bpd to 8.3 million bpd as imports into the Gulf Coast
alone hit 4.1 million bpd last week, the highest rate since
As refinery rates hit their highest since September, stocks
of distillates - which include heating oil, diesel fuel, jet
fuel and other products - rose to 170 million barrels, levels
not seen since October 2010.
Distillate stockpiles soared 8.4 million
barrels, versus expectations for a 899,000-barrel increase, the
EIA data showed.
Gasoline stocks rose 5 million barrels,
compared with analysts' expectations in a Reuters poll for a 1.6
Despite the bearish inventory data, the 3-2-1 crack spread
CL321-1=R, a key metric that measures the profits refiners can
make by converting crude oil into gasoline and diesel, was up by
nearly 6 percent to $15.90 a barrel.
The bearish data was offset by the ongoing crude oil glut
and another week of strong U.S. product export data, traders
The four-week average of U.S. product exports was 5.2
million bpd last week, the third-highest weekly figure in EIA
"While utilization is high in the U.S., it's real low in
Mexico and Latin American, creating a stronger export market for
U.S. refiners," said Mark Broadbent, a refinery analyst at Wood
(Reporting By David Gaffen; Additional reporting by Jarrett
Renshaw and Scott Disavino; Editing by Marguerita Choy)