US crude inventories rise unexpectedly, product stocks dip

NEW YORK: US crude stocks unexpectedly rose last week to a fresh record high, while gasoline and distillate inventories fell less than expected, the Energy Information Administration said on Wednesday, interrupting a recent string of bullish news for the oil market.

Crude inventories rose 1.6 million barrels in week ending March 31, compared with expectations for a decrease of 435,000 barrels. Stocks, which have been steadily building to record highs this year, once again were at a peak, reaching 535.5 million barrels.

The oil market pared gains after the bearish report, with US West Texas crude futures up just 22 cents at $51.25 a barrel by 10:54 a.m. EDT (1554 GMT); the contract earlier touched a high of $51.88 a barrel.

Crude remains on track for its sixth day of gains in the last seven. Brent crude was up 25 cents to $54.42 a barrel, also giving up some of the day's gains.

Crude stocks at the Cushing, Oklahoma, delivery hub for WTI, rose 1.4 million barrels to a record at 69.1 million barrels. US Gulf Coast inventories also jumped, by 2.7 million barrels, to a peak of 280.9 million barrels, the EIA said.

"It was a solidly bearish report, especially in relation to expectations," said John Kilduff, partner at Again Capital in New York.

The refined product drawdowns were about half of analysts' forecasts in a Reuters poll.

Gasoline stocks fell 618,000 barrels, compared with analysts' expectations for a 1.4 million-barrel drop.

Inventories of the motor fuel have been declining, and are now at lower levels than at this time last year, but they remain seasonally high.

Gasoline futures turned negative on the news; US RBOB futures fell 0.3 percent to $1.7170 a gallon.

Distillate stockpiles, which include diesel and heating oil, slipped 536,000 barrels, versus a 1.0 million-barrel drop forecast, the EIA data showed.

"The pace of decline in refined product inventories ebbed and will likely reverse with the increased refinery activity," Kilduff said.

Refinery crude runs rose 203,000 barrels per day and utilization rates climbed 1.5 percentage points to 90.8 percent of total capacity, EIA data showed, as plants restart from spring turnarounds.

US crude imports were largely flat, inching up 61,000 barrels per day, while exports, which have been volatile, fell to 575,000 bpd from the previous week's 1.01 million bpd.