According to the Energy Information Administration (EIA), U.S. oil stockpiles saw an increase last week due to rising crude imports and declining exports, coupled with weakened gasoline and distillate demand. Crude inventories climbed by 833,000 barrels to reach 419.1 million barrels for the week ending September 6, which was below analysts’ expectations of a 987,000-barrel increase.
At the Cushing, Oklahoma delivery hub, crude stocks fell by 1.7 million barrels. Following the report, crude benchmarks experienced reduced gains; Brent crude was up by 0.7%, while U.S. oil futures increased by 1% by mid-morning.
Net U.S. crude imports rose significantly, hitting their highest level since June at 1.5 million barrels per day, while crude exports dropped by 451,000 bpd to 3.31 million bpd, also the lowest since June. Analysts noted that the volatile nature of import figures could reflect shipping activities in the Gulf Coast, especially with Hurricane Francine potentially disrupting tanker flows.
As energy facilities along the Gulf Coast began scaling back operations in anticipation of the hurricane, refinery crude runs decreased by 141,000 bpd, and utilization rates fell by 0.5 percentage points to 92.8% of total capacity.
Total product supplied, a measure of demand, also decreased by 1.2 million bpd to 19.4 million bpd, with gasoline stocks rising by 2.3 million barrels to 221.6 million barrels, contrary to forecasts for a draw. Distillate stockpiles increased by 2.3 million barrels, exceeding expectations.
Josh Young, chief investment officer at Bison Interests, described the report as bearish, highlighting particularly low gasoline demand. He suggested that the rise in product inventories might be a precautionary measure ahead of the incoming hurricane.