August 26, 2015 / 3:18 PM / 3 years ago

CORRECTED-UPDATE 1-U.S. fuel stocks rise, driving prices lower despite big crude draw

(Corrects headline to show crude draw, not build)

NEW YORK, Aug 26 (Reuters) - U.S. crude oil stockpiles fell sharply last week as imports tumbled, while gasoline and distillate inventories rose despite a reduction in refinery runs, data from the Energy Information Administration showed on Wednesday.

Crude inventories fell 5.5 million barrels in the week to Aug. 21, the biggest one-week decline since early June and counter to analysts’ expectations for an increase of 1 million barrels. U.S. crude imports fell last week by 740,000 barrels per day.

Despite the unexpected fall in crude stocks, which was in line with the industry group the American Petroleum Institute’s report late on Tuesday, oil prices whipped lower following the data.

U.S. crude fell more than 1 percent to below $39 a barrel, nearing the 6-1/2-year lows touched earlier this week, and New York gasoline futures tumbled down more than 4 percent at one point as traders focused on rising fuel supplies, a worrying sign for U.S. demand.

“The products builds are overwhelming the constructive crude draw,” said Scott Shelton, commodities specialist at ICAP in Durham, North Carolina.

Gasoline stocks rose 1.7 million barrels, compared with forecasts for a 1.3 million-barrel drop. Gasoline prices spiked earlier this month after the refinery disruptions, although nationwide inventories remain in line or slightly above seasonal norms.

Some analysts also said the decline in crude stocks may have been an aberration driven by a brief dip in imports. Most are bracing for a sustained rise in stocks over the coming months as U.S. refiners shut for seasonal work.

“We had a draw, but the market needs to see weeks of that to be convinced,” said Gene McGillian, senior analyst at Tradition Energy in Stamford, Connecticut.

Refinery crude runs, which reached record highs of more than 17 million barrels per day (bpd) earlier in August, fell by 117,000 bpd to their lowest rate since early July amid a wave of unexpected shutdowns. Refinery utilization rates fell 0.6 percentage point to 94.5 percent of total capacity.

Distillate stockpiles, which include diesel and heating oil, rose by 1.4 million barrels, versus expectations for a 1.0 million barrels increase, the EIA data showed.

Crude stocks at the Cushing, Oklahoma, delivery hub rose 256,000 barrels, a second consecutive weekly increase, EIA said. (Reporting by Barani Krishnan, Robert Gibbons and Catherine Ngai in New York; Editing by Marguerita Choy)

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